Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/299375 
Erscheinungsjahr: 
2024
Schriftenreihe/Nr.: 
KOF Working Papers No. 516
Verlag: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Zusammenfassung: 
We introduce banks that issue liquid deposits backed by bonds and capital into an otherwise standard cash-in-advance economy. Liquidity transformation by banks increases aggregate consumption and investment relative to a cash-only economy but can also lead to inefficient overinvestment. Furthermore, liquidity transformation can lead to multiple steady-state equilibria with different interest rates and real outcomes. Whenever multiple equilibria exist, one of them constitutes a 'liquidity trap', in which nominal bond rates equal zero and banks are indifferent between holding bonds and reserves. Whether economic activity is higher in a liquidity trap or in a (coexisting) equilibrium with positive interest rates is ambiguous, but the liquidity trap equilibrium is more likely to go in hand with overinvestment.
Schlagwörter: 
Banks
Liquidity
Monetary Policy
Zero-Lower Bound
JEL: 
E4
E5
Persistent Identifier der Erstveröffentlichung: 
Dokumentart: 
Working Paper

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