Private money and reserve management in a random-matching model

Ricardo Cavalcanti, Andres Erosa and Ted Loch Temzelides

No 128, Discussion Paper / Institute for Empirical Macroeconomics from Federal Reserve Bank of Minneapolis

Abstract: In this paper, we develop a model of money and reserve-holding banks. We allow for private liabilities to circulate as media of exchange in a random-matching framework. Some individuals, which we identify as banks, are endowed with a technology to issue private notes and to keep reserves with a clearinghouse. Bank liabilities are redeemed according to a stochastic process that depends on the endogenous trades. We find conditions under which note redemptions act as a force that is sufficient to stabilize note issue by the banking sector.

Keywords: Banks and banking; Bank notes; Intermediation (Finance) (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (94)

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Related works:
Journal Article: Private Money and Reserve Management in a Random-Matching Model (1999)
Working Paper: PRIVATE MONEY AND RESERVE MANAGEMENT IN A RANDOM MATCHING MODEL (1998)
Working Paper: Private Money and Reserve Management in a Random Matching Model (1998)
Working Paper: Private money and reserve management in a random matching model (1997)
Working Paper: Private Money and Reserve Management in a Random Matching Model (1997)
Working Paper: Private Money and Reserve Management in a Random Matching Model (1997)
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