Federal Reserve Balance-Sheet Policy in an Ample Reserves Framework: An Inventory Approach

Joseph Haubrich

No 23-25R, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Implementing monetary policy in an ample reserves regime means choosing a level of reserves that balances the cost of reserves against interest rate volatility. I use techniques from stochastic inventory theory to calibrate the size of the buffer needed to keep reserves above the ample level, and find the buffer size to be modest compared to the level of reserves needed to reach the ample level.

Keywords: reserves; monetary policy (search for similar items in EconPapers)
JEL-codes: D25 E58 (search for similar items in EconPapers)
Pages: 23
Date: 2023-11-08, Revised 2026-02-10
New Economics Papers: this item is included in nep-acc, nep-cba and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwq:97254

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DOI: 10.26509/frbc-wp-202325r

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