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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title The safe asset, banking equilibrium, and optimal central bank monetary, prudential and balance-sheet policies
Organization Unit
Authors
  • Michael Magill
  • Martine Quinzii
  • Jean-Charles Rochet
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Journal of Monetary Economics
Publisher Elsevier
Geographical Reach international
ISSN 0304-3932
Volume 112
Page Range 113 - 128
Date 2020
Abstract Text A simple equilibrium model is presented which permits the joint study of optimal Central Bank prudential, monetary and balance sheet policies in the pre and post 2008 Crisis periods. It explains the new policies-the purchase of risky securities (QE), payment of interest on reserves (IR) and use of reverse repo (RRP)-as the response to the lack of safe assets in the economy, and shows why these policies were not needed to achieve optimality before 2008, but were needed for the 2008 Crisis and thereafter.
Digital Object Identifier 10.1016/j.jmoneco.2019.02.002
Other Identification Number merlin-id:17628
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