Float on a note

• 成果类型: Article
• 署名作者: Wallace, Neil; Zhu, Tao
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Cornell University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.10.018
• 发表日期: 2007
• 页码: 229-246
• 关键词: under issue of bank notes; matching model; float; currency inelasticity

摘要

From 1863-1914, banks in the U.S. could issue notes subject to full collateral, a tax on outstanding notes, redemption of notes on demand, and a clearing fee per issued note cleared through the Treasury. The system failed to satisfy a purported arbitrage condition: the yield on collateral exceeded the tax rate plus the product of the clearing fee and the average clearing rate of notes. The failure is explained by a model in which note issuers choose to issue notes only in trades that produce a low clearing rate (high float), but in which there are diminishing returns to additional note issue. (c) 2006 Elsevier B.V. All rights reserved.