Erschienen in:FRB of Cleveland Working Paper ; No. 03-10
Umfang:
1 Online-Ressource (33 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.1026281
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 2003 erstellt
Beschreibung:
The authors construct a simple environment that combines a limited communication friction and a limited information friction in order to generate a role for money and intermediation. The authors ask whether there is any reason to expect the emergence of a banking sector (i.e., institutions that combine the business of money creation with the business of intermediation). In their model, the unique equilibrium is characterized, in part, by the existence of an agent that: (1) creates money (a debt instrument that circulates as a means of payment); (2) lends it out (swapping it for less liquid forms of debt); (3) is responsible for monitoring those agents in control of the capital backing the illiquid debt; and (4) collects on money loans as they come due. Furthermore, the bank money in their model is a debt instrument that embeds within it important stipulations that are found in actual private money instruments. Thus, the model goes some way in addressing the questions of why private money takes the form that it does, as well as why private money is typically supplied by banks