Monetary Policy with Asset-Backed Money
Project funded by own resources
Project title Monetary Policy with Asset-Backed Money
Principal Investigator(s) Berentsen, Aleksander
Organisation / Research unit Departement Wirtschaftswissenschaften / Wirtschaftstheorie (Berentsen)
Project Website
Project start 01.08.2013
Probable end 31.07.2027
Status Active

We study the use of intermediated assets as media of exchange in a neo- classical growth model. An intermediary is delegated control over productive capital and finances itself by issuing claims against the revenue generated by its operations. Unlike physical capital, intermediated claims are assumed to be liquid-they constitute a form of asset-backed money. The intermediary is assumed to control 1) the number of claims outstanding, 2) the dividends paid out to claim holders and 3) the fee charged for collecting the dividend. We find that for patient economies, the first-best allocation can always be implemented as a competitive equilibrium through an appropriately designed intermediary policy rule. The optimal policy requires strictly positive inflation. While it is also possible to implement the first-best by introducing at money and a lump- sum tax instrument, our results demonstrate that neither of these interventions are necessary for efficiency.

Financed by University funds

Published results ()

  ID Autor(en) Titel ISSN / ISBN Erschienen in Art der Publikation
3693113  Andolfatto, David; Berentsen, Aleksander; Waller, Christopher  Monetary policy with asset-backed money  0022-0531 ; 1095-7235  Journal of Economic Theory  Publication: JournalArticle (Originalarbeit in einer wissenschaftlichen Zeitschrift) 

Cooperations ()

  ID Kreditinhaber Kooperationspartner Institution Laufzeit - von Laufzeit - bis
2743149  Berentsen, Aleksander  Andolfatto, David  Federal Reserve Bank of St. Louis and Simon Fraser University  01.08.2013  31.07.2015 
2743152  Berentsen, Aleksander  Waller, Christoph  Federal Reserve Bank of St. Louis and University of Notre Dame  01.08.2013  31.07.2015 

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