Optimal reserve requirements, deposit taxation, and the demand for money

Mourmouras, Alex; Russell, Steven

doi:10.1016/0304-3932(92)90048-7

Cited by 14 publications

(11 citation statements)

References 9 publications

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“…This result is similar to a result obtained by Mourmouras and Russell (1992), who show, in a model with homogeneous agents but risky returns on privately-issued assets, that when the government seeks to maximize steady-state utility the optimal allocation can always be supported by a combination of an unaugmented inflation tax and a proportional tax on deposits.…”

Section: Proposition 2 Suppose the Government Is Not Concerned About supporting

confidence: 87%

“…Thus, this paper extends the literature on optimal single reserve requirementsa literature that includes contributions by Freeman {1987), Brock (1989), Bencivenga and Smith (1992), Mourmouras and Russell (1992), Cothren and Waud (1994), and E:spinosa and Yip (1996) -to the case of multiple reserve requirements.…”

Section: Introductionmentioning

confidence: 69%

“…9 Rich savers' endowments are assumed to be large enough that this minimum denomination is irrevelant to them. Private and government bonds are assumed to have larger minimum denominations that make them inaccessible to any agents except banks.…”

Section: Introductionmentioning

confidence: 99%

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Are There Optimal Multiple-Reserve Requirements?

Espinosa‐Vega

Russell

2001

Journal of Financial Intermediation

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: A number of developing countries have adopted deficit-finance regimes involving multiple reserve requirements. One question the previous literature on this phenomenon has not addressed is Mlether multiple-reserves regimes can improve on regimes involving single-currency-reserve requirements if the policy settings of the latter regimes are assumed to be chosen optimally. We find that a "conventional" multiple-reserves regime-a regime with positive nominal rates on reservable bondscarmot Pareto-improve an optimal single-currency-regime but can, in some cases, increase social welfare over such a regime. Terms of use: Documents in EconStor may

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Section: Proposition 2 Suppose the Government Is Not Concerned About supporting

confidence: 87%

Section: Introductionmentioning

confidence: 69%

See 1 more Smart Citation

Are There Optimal Multiple-Reserve Requirements?

Espinosa‐Vega

Russell

2001

Journal of Financial Intermediation

Self Cite

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“…One alternative way to characterize the relationship between an inßation tax and a tax on social security beneÞts involves an equivalence result that is very closely related to Theorem 2. This result, which we will call Proposition 2, establishes that any monetary equilibrium with government currency, 13 Note that in the previous economy, where there were no binding reserve requirements, we could replace the bonds with currency, or vice-versa, rather trivially, since both had the same real rate of return. This is an example of the irrelevance of open market operations in economies of this type: see Sargent (1987, ch.…”

Section: Saving-based Social Securitymentioning

confidence: 76%

“…2 There is also a literature that asks whether the allocations supported by particular monetary policy regimes can be supported by monetary policy regimes of a different type. Examples include Mourmouras and Russell (1992) and Bacchetta and Caminal (1994). 3 …”

Section: Introductionmentioning

confidence: 99%

Monetary Policy, Fiscal Policy, and the Inflation Tax: Equivalence Results

2003

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This paper clariÞes and extends previous work on the equivalence between monetary regimes and Þscal regimes involving social security systems. We consider equivalence across regimes, showing that monetary regimes are equivalent to one or both of two alternative types of social security regimes. Two implications emerge. One is that Þnanciing a real expenditure by increasing the inßation rate is equivalent, across regimes, to Þnancing the expenditure by increasing the tax rate on social security beneÞts. In addition, our results imply that a wide range of monetary policy actions are equivalent, across regimes, to Þscal policy actions that change the scale of the social security system and the tax rates on social security beneÞts and/or bank deposits.

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