A Note on Reserve Requirements and Public Finance
Details
Serval ID
serval:BIB_9C51E66CF348
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
A Note on Reserve Requirements and Public Finance
Journal
International Review of Economics and Finance
ISSN
1059-0560
Publication state
Published
Issued date
1994
Peer-reviewed
Oui
Volume
3
Number
1
Pages
107-118
Language
english
Abstract
We use a simple general equilibrium model to show that any allocation (private consumption, real cash balances, and government spending) supported by a policy that involves reserve requirements (plus inflation and public debt) can also be supported by a policy that uses a direct tax on bank deposits (plus inflation and public debt), and vice-versa. In particular, a proportional reserve requirement is equivalent to a proportional tax on deposits plus an open market sale of bonds of an amount equal to banks' reserves.
Create date
30/03/2009 13:09
Last modification date
20/08/2019 15:03