Liquidity, Financial Intermediation, and Monetary Policy in a New Monetarist Model

Stephen Williamson

MPRA Paper from University Library of Munich, Germany

Abstract: A model of monetary exchange with private financial intermediation is constructed. Claims on financial intermedaries of two types are traded in transactions: circulating notes and deposits. There can be a role for the government in supplying liqudity, and level changes in the money supply accomplished through open market operations can be nonneutral. A Friedman rule is suboptimal, due to costs of maintaining the stock of currency. The model is used to address some issues related to current monetary policy in the United States.

Keywords: Monetary policy; financial intermediation; financial crisis (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-cba, nep-dge, nep-fdg, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Liquidity, Financial Intermediation, and Monetary Policy in a New Monetarist Model (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20692

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