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 https://ideas.repec.org/p/zur/econwp/198.html
Project start 01.01.2015
Probable end 31.12.2027
Status Active
Abstract

We study the use of asset-backed money in a neoclassical growth model with illiquid capital. A mechanism is delegated control of productive capi- tal and issues claims against the revenue it earns. These claims constitute a form of asset-backed money. The mechanism determines (i) the number of claims outstanding, (ii) the dividends paid to claim holders, and (iii) the structure of redemption fees. We find that for capital-rich economies, the first-best allocation can be implemented and price stability is optimal. However, for sufficiently capital-poor economies, achieving the first-best allocation requires a strictly positive rate of inflation. In general, the minimum infiation necessary to implement the first-best allocation is above the Friedman rule and varies with capital wealth.

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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