Aggregate uncertainty, money and banking

• 成果类型: Article
• 署名作者: Sun, Hongfel
• 署名单位: University of Toronto
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2006.11.006
• 发表日期: 2007
• 页码: 1929-1948
• 关键词: aggregate uncertainty; banking; Inside money; Outside money

摘要

This paper addresses the problem of monitoring the monitor in a model of money and banking with private information and aggregate uncertainty. There is no need to monitor a bank if it requires loans to be repaid partly with money. A market arises at the repayment stage and generates information-revealing prices that perfectly discipline the bank. This mechanism also applies when there exist multiple banks. With multiple banks, competition of private monies improves welfare. A prohibition on private money issue not only eliminates money competition but also triggers free-rider problems among banks, which is detrimental to welfare. (c) 2006 Elsevier B.V. All rights reserved.