Interest on reserves, policy rules and quantitative easing

Edward Prescott

Journal of Economic Dynamics and Control, 2014, vol. 49, issue C, 109-111

Abstract: Hundred percent reserve transaction banking system is proposed with tax-free interest on demand deposits and interest bearing reserves. To eliminate shadow banking arrangements, a 100% tax on net interest income is proposed for limited liability businesses. All financing of businesses would be mutual as currently most is. With this arrangement there would be no bank runs associated giving rise to a financial crisis.

Keywords: 100% Reserve banking; Transaction banks; Monetary policy rules (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:49:y:2014:i:c:p:109-111

DOI: 10.1016/j.jedc.2014.09.013

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