The optimal quantity of money and partially-liquid assets

• 成果类型: Article
• 署名作者: Zannini, Ugo
• 署名单位: Luiss Guido Carli University; Luiss Guido Carli University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105034
• 发表日期: 2020
• 关键词: Asset market; financial intermediation; liquidity effect; monetary policy; risk sharing

摘要

In a monetary economy a la Williamson (2012), in which a competitive financial sector insures agents facing idiosyncratic liquidity risk on interest-bearing assets, we introduce a competitive market for liquidity reallocation and study optimal policy. We show that, at any inflation rate above the Friedman rule, the market is a welfare-improving risk-sharing mechanism over Williamson's (2012) deposit contract. The optimal policy requires real asset scarcity, which increases the demand for money, and shrinks consumption inequality between asset and money users. Also, we demonstrate that the equilibrium deposit contract with re-trading opportunities in the asset market replicates the market allocations. (C) 2020 Elsevier Inc. All rights reserved.