Opposite policy implications in the theory of money and banking

Detalhes bibliográficos
Autor(a) principal: Bertolai,Jefferson D. P.
Data de Publicação: 2013
Outros Autores: Cavalcanti,Ricardo de O.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Revista Brasileira de Economia (Online)
Texto Completo: http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000400002
Resumo: The recent financial crisis creates a demand for welfare-based models of financial regulation and liquidity shortages. In this paper, we review policy implications from two cornerstone models and show that they imply different responses in terms of intertemporal returns of financial liabilities. In the first case, a version of the Cavalcanti and Wallace (1999), random-matching model, monitored agents are led to promote inflation in bank-issued money. In the second case, a sequential-service version of the Diamond and Dybvig (1983) model of bank runs with insolvency, increases in long-run returns can prevent bank runs by reducing the provision of liquidity.
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spelling Opposite policy implications in the theory of money and bankingInside MoneyInflationFinancial FragilityInsolvencyThe recent financial crisis creates a demand for welfare-based models of financial regulation and liquidity shortages. In this paper, we review policy implications from two cornerstone models and show that they imply different responses in terms of intertemporal returns of financial liabilities. In the first case, a version of the Cavalcanti and Wallace (1999), random-matching model, monitored agents are led to promote inflation in bank-issued money. In the second case, a sequential-service version of the Diamond and Dybvig (1983) model of bank runs with insolvency, increases in long-run returns can prevent bank runs by reducing the provision of liquidity.Fundação Getúlio Vargas2013-12-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000400002Revista Brasileira de Economia v.67 n.4 2013reponame:Revista Brasileira de Economia (Online)instname:Fundação Getulio Vargas (FGV)instacron:FGV10.1590/S0034-71402013000400002info:eu-repo/semantics/openAccessBertolai,Jefferson D. P.Cavalcanti,Ricardo de O.eng2013-11-26T00:00:00Zoai:scielo:S0034-71402013000400002Revistahttp://bibliotecadigital.fgv.br/ojs/index.php/rbe/issue/archivehttps://old.scielo.br/oai/scielo-oai.php||rbe@fgv.br1806-91340034-7140opendoar:2013-11-26T00:00Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)false
dc.title.none.fl_str_mv Opposite policy implications in the theory of money and banking
title Opposite policy implications in the theory of money and banking
spellingShingle Opposite policy implications in the theory of money and banking
Bertolai,Jefferson D. P.
Inside Money
Inflation
Financial Fragility
Insolvency
title_short Opposite policy implications in the theory of money and banking
title_full Opposite policy implications in the theory of money and banking
title_fullStr Opposite policy implications in the theory of money and banking
title_full_unstemmed Opposite policy implications in the theory of money and banking
title_sort Opposite policy implications in the theory of money and banking
author Bertolai,Jefferson D. P.
author_facet Bertolai,Jefferson D. P.
Cavalcanti,Ricardo de O.
author_role author
author2 Cavalcanti,Ricardo de O.
author2_role author
dc.contributor.author.fl_str_mv Bertolai,Jefferson D. P.
Cavalcanti,Ricardo de O.
dc.subject.por.fl_str_mv Inside Money
Inflation
Financial Fragility
Insolvency
topic Inside Money
Inflation
Financial Fragility
Insolvency
description The recent financial crisis creates a demand for welfare-based models of financial regulation and liquidity shortages. In this paper, we review policy implications from two cornerstone models and show that they imply different responses in terms of intertemporal returns of financial liabilities. In the first case, a version of the Cavalcanti and Wallace (1999), random-matching model, monitored agents are led to promote inflation in bank-issued money. In the second case, a sequential-service version of the Diamond and Dybvig (1983) model of bank runs with insolvency, increases in long-run returns can prevent bank runs by reducing the provision of liquidity.
publishDate 2013
dc.date.none.fl_str_mv 2013-12-01
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000400002
url http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000400002
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 10.1590/S0034-71402013000400002
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv text/html
dc.publisher.none.fl_str_mv Fundação Getúlio Vargas
publisher.none.fl_str_mv Fundação Getúlio Vargas
dc.source.none.fl_str_mv Revista Brasileira de Economia v.67 n.4 2013
reponame:Revista Brasileira de Economia (Online)
instname:Fundação Getulio Vargas (FGV)
instacron:FGV
instname_str Fundação Getulio Vargas (FGV)
instacron_str FGV
institution FGV
reponame_str Revista Brasileira de Economia (Online)
collection Revista Brasileira de Economia (Online)
repository.name.fl_str_mv Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)
repository.mail.fl_str_mv ||rbe@fgv.br
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