| Fecha: |
2018 |
| Resumen: |
This paper incorporates endogenous money creation into the liquidity mismatch problem of Diamond and Dybvig (1983). We characterize a nominal economy where demandable deposits are created through lending. Depositors use sight deposits to buy consumption goods and the banks manage reserves to clear payments and to offset liquidity risk. We show that deposit contracts are suboptimal in terms of liquidity risk-sharing. We also observe that the self-fulfilling run depends on the refinancing rate of the central bank. Our analysis emphasizes the importance of effective lender of last resort policies to prevent expectational banking panics. |
| Resumen: |
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396. |
| Ayudas: |
European Commission 649396
|
| Derechos: |
Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.  |
| Lengua: |
Anglès |
| Colección: |
Barcelona Graduate School of Economics. ADEMU working paper series |
| Colección: |
ADEMU Working Paper Series ; 90 |
| Documento: |
Working paper |
| Materia: |
Bank runs ;
Inside money ;
Risk-sharing |
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