TY  - UNPD
A1  - Bental, Benjamin
A1  - Eden, Benjamin
T1  - The real effects of reserve requirements : [Version February 1998]
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 1998,18
N2  - We review arguments for and against reserve requirements and conclude that the main question is whether a distinction between money creation and intermediation can be made. We argue that such a distinction can be made in a money-in-advance economy and show that if the money-in-advance constraint is universally binding then reserve requirements on checkable accounts have no effect on intermediation. We then proceed to show that in a model in which trade is uncertain and sequential, a fractional reserve banking system gives rise to endogenous monetary shocks. These endogenous monetary shocks lead to fluctuations in capacity utilisation and waste. When the moneyin-advance constraint is universally binding, a 100% reserve requirement on checkable accounts can eliminate this waste.
T3  - CFS working paper series - 1998, 18 
KW  - Reserve requirements
KW  - money creation
KW  - intermediation
KW  - monetary shocks
Y1  - 1998
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/22940
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-229402
IS  - Version February 1998
ER  -