Title of article
Interbankmarketliquidityandcentralbankintervention$
Author/Authors
FranklinAllen، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
14
From page
639
To page
652
Abstract
Wedevelopasimplemodeloftheinterbankmarketwherebankstradealongterm,safe
asset.Whenthereisalackofopportunitiesforbankstohedgeidiosyncraticand
aggregate liquidityshocks,theinterbankmarketischaracterizedbyexcessiveprice
volatility.Insuchasituation,acentralbankcanimplementtheconstrainedefficient
allocationbyusingopenmarketoperationstofixtheshortterminterestrate.Itcan
be constrainedefficientforbankstohoardliquidityandstoptradingwitheachother
if thereissufficientuncertaintyaboutaggregateliquiditydemandcomparedto
idiosyncraticliquiditydemand.
Keywords
Open marketoperationsConstrained efficiency
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846319
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