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Creator: Sargent, Thomas J. and Wallace, Neil Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 214 Parola chiave: Private issue inside money, Bimetallism, Symmetallism, Seignorage, Quantity theory of money, and Commodities Soggetto: E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems and E52 - Monetary Policy
Creator: Miller, Preston J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 220 Descrizione:
Working paper 220 was presented at The Economic Consequences of Government Deficits: an Economic Policy Conference, cosponsored by the Center for the Study of American Business and the Institute of Banking and Financial Markets at Washington University, St. Louis, Missouri, October 29-30, 1982.
Parola chiave: Inflation, Deficit, Budget policy, Federal debt, and Tax policy Soggetto: E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems, H63 - National Debt; Debt Management; Sovereign Debt, E52 - Monetary Policy, and H62 - National Deficit; Surplus
Creator: Smith, Bruce D. (Bruce David), 1954-2002 Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 228 Abstract:
"Summary of Recommendations: . . . Repeal present control by the System over interest rates that member banks may pay on time deposits and present prohibition of interest payments by member banks on demand deposits." Milton Friedman (1960, p. 100) "I conclude that the over-all monetary effects of ceiling regulations are small and easy to neutralize by traditional monetary controls. The allocative and distributive effects are, however, unfortunate. The root of the policy was an exaggerated and largely unnecessary concern for the technical solvency of savings and loan associations." James Tobin (1970, p. 5) The regulation of deposit interest rates has received little support from economists. The same is true for the original rationale for such regulation: that bank competition for deposits generates inherent "instability" in the banking system. This paper develops an "adverse selection" model of banking in which this rationale is correct. Moreover, in this model instability in the banking system can arise despite the presence of a "lender of last resort," and despite the absence of any need for "deposit insurance." However, in the world described, the regulation of deposit interest rates is shown to be an appropriate response to "instability" in the banking system. Finally, it is argued that "adverse selection" models of deposit interest rate determination can confront a number of observed phenomena that are not readily explained in other contexts.
Parola chiave: Banking Act, Banking panics, Risk, Instability, Bank regulation, Unregulated banks, Banking Act of 1935, and Banking Act of 1933 Soggetto: G11 - Portfolio Choice; Investment Decisions, E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems, D82 - Asymmetric and Private Information; Mechanism Design, and G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages