TY  - RPRT
A1  - Bental, Benjamin
A1  - Eden, Benjamin
T1  - The real effects of reserve requirements
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 money-in-advance constraint is universally binding, a 100% reserve requirement on checkable accounts can eliminate this waste.
KW  - Reserve Requirements
KW  - Money Creation
KW  - Intermediation
KW  - Monetary Shocks
Y1  - 2006
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/2302
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-30963
PB  - [Verlag nicht ermittelbar]
CY  - [Erscheinungsort nicht ermittelbar]
ER  -