Monetary Policy Implementation with an Ample Supply of Reserves

Gara Afonso, Kyungmin Kim, Antoine Martin, Ed Nosal, Simon Potter and Sam Schulhofer-Wohl
Additional contact information
Kyungmin Kim: https://www.federalreserve.gov/econres/kyungmin-kim.htm

No 910, Staff Reports from Federal Reserve Bank of New York

Abstract: We offer a parsimonious model of the reserve demand to study the trade-offs associated with various monetary policy implementation frameworks. Our model considers a reserve demand function that encompasses banks' preferences for reserves in the post 2007-2009 financial crisis world and incorporates shocks to the demand for and the supply of reserves. We find that the best policy implementation outcomes are realized when reserves are somewhere in between scarce and abundant. This outcome is consistent with the Federal Open Market Committee's 2019 announcement to implement monetary policy in a regime with an ample supply of reserves.

Keywords: federal funds market; monetary policy implementation; ample reserves (search for similar items in EconPapers)
JEL-codes: E42 E58 (search for similar items in EconPapers)
Pages: 59
Date: 2020-01-01
Note: Revised January 2025.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr910.pdf Full text (application/pdf)
https://www.newyorkfed.org/research/staff_reports/sr910.html Summary (text/html)

Related works:
Working Paper: Monetary Policy Implementation with an Ample Supply of Reserves (2020)
Working Paper: Monetary Policy Implementation with an Ample Supply of Reserves (2020)
Working Paper: Monetary Policy Implementation With an Ample Supply of Reserves (2020)
Working Paper: Monetary policy implementation with an ample supply of reserves (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednsr:87391

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Staff Reports from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().