Pegging the interest rate on bank reserves: A resolution of New Keynesian puzzles and paradoxes *

• 成果类型: Article
• 署名作者: Diba, Behzad; Loisel, Olivier
• 署名单位: Georgetown University; Institut Polytechnique de Paris; ENSAE Paris; Ecole Polytechnique
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2020.10.002
• 发表日期: 2021
• 页码: 230-244
• 关键词: Forward-guidance puzzle; Fiscal-multiplier puzzle; Paradox of flexibility; Paradox of toil; Interest rate on reserves

摘要

Introducing bank reserves (or money) into the basic New Keynesian (NK) model offers a resolution of NK puzzles and paradoxes. The resulting models deliver local-equilibrium determinacy under an exogenous interest rate on reserves and an exogenous nominal stock of reserves, even for an arbitrarily small monetary friction. This leads to a resolution of the forward-guidance puzzle, the fiscal-multiplier puzzle, and the paradox of flexibility. As the monetary friction becomes vanishingly small, the models converge to the basic NK model and serve to select a particular equilibrium of that model -which also offers a resolution of the paradox of toil. (c) 2020 Elsevier B.V. All rights reserved.