Interest on reserves, helicopter money and new monetary policy.

We build a nonlinear dynamic model with currency, demand deposits and bank reserves. Monetary base is controlled by central bank, while money supply is determined by the interactions between central bank, commercial banks and public. In economic crises when banks cut loans, monetary policy following...

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Autor principal:	Duong Ngotran
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/c2e82e2990cc4f74b39996ee5095b862
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spelling	oai:doaj.org-article:c2e82e2990cc4f74b39996ee5095b8622021-12-02T20:06:52ZInterest on reserves, helicopter money and new monetary policy.1932-620310.1371/journal.pone.0253956https://doaj.org/article/c2e82e2990cc4f74b39996ee5095b8622021-01-01T00:00:00Zhttps://doi.org/10.1371/journal.pone.0253956https://doaj.org/toc/1932-6203We build a nonlinear dynamic model with currency, demand deposits and bank reserves. Monetary base is controlled by central bank, while money supply is determined by the interactions between central bank, commercial banks and public. In economic crises when banks cut loans, monetary policy following a Taylor rule is not efficient. Negative interest on reserves or forward guidance is effective, but deflation is still likely to be persistent. If central bank simultaneously targets both interest rate and money supply by a Taylor rule and a Friedman's k-percent rule, inflation and output are stabilized. An interest rate rule policy is just a subset of a more general monetary policy framework in which central bank can move interest rate and money supply in every direction.Duong NgotranPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 7, p e0253956 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Duong Ngotran Interest on reserves, helicopter money and new monetary policy.
description	We build a nonlinear dynamic model with currency, demand deposits and bank reserves. Monetary base is controlled by central bank, while money supply is determined by the interactions between central bank, commercial banks and public. In economic crises when banks cut loans, monetary policy following a Taylor rule is not efficient. Negative interest on reserves or forward guidance is effective, but deflation is still likely to be persistent. If central bank simultaneously targets both interest rate and money supply by a Taylor rule and a Friedman's k-percent rule, inflation and output are stabilized. An interest rate rule policy is just a subset of a more general monetary policy framework in which central bank can move interest rate and money supply in every direction.
format	article
author	Duong Ngotran
author_facet	Duong Ngotran
author_sort	Duong Ngotran
title	Interest on reserves, helicopter money and new monetary policy.
title_short	Interest on reserves, helicopter money and new monetary policy.
title_full	Interest on reserves, helicopter money and new monetary policy.
title_fullStr	Interest on reserves, helicopter money and new monetary policy.
title_full_unstemmed	Interest on reserves, helicopter money and new monetary policy.
title_sort	interest on reserves, helicopter money and new monetary policy.
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/c2e82e2990cc4f74b39996ee5095b862
work_keys_str_mv	AT duongngotran interestonreserveshelicoptermoneyandnewmonetarypolicy
_version_	1718375327150899200

Interest on reserves, helicopter money and new monetary policy.

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