Private money creation, liquidity crises, and government interventions

• 成果类型: Article
• 署名作者: Benigno, Pierpaolo; Robatto, Roberto
• 署名单位: Luiss Guido Carli University; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.07.005
• 发表日期: 2019
• 页码: 42-58
• 关键词: Public and private liquidity; financial crises; Deposit insurance; Asset purchases; Financial regulation

摘要

The joint supply of public and private liquidity is examined when financial intermediaries issue both riskless and risky debt and the economy is vulnerable to liquidity crises. Government interventions in the form of asset purchases and deposit insurance are equivalent (in the sense that they sustain the same equilibrium allocations), increase welfare, and, if fiscal capacity is sufficiently large, eliminate liquidity crises. In contrast, restricting intermediaries to investing in low-risk projects always eliminates liquidity crises but reduces welfare. Under some conditions, deposit insurance gives rise to an equilibrium in which intermediaries that issue insured debt (i.e., traditional banks) coexist with others that issue uninsured debt (i.e., shadow banks), despite the two being ex ante identical. (C) 2019 The Authors. Published by Elsevier B.V.