Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 16, 2023 erstellt
Beschreibung:
In this paper we show that nominal demand-deposits are not, in general, Pareto optimal contracts. We construct a variation of the Diamond-Dybvig model where bank intermediation is done through inside money, and outside money is required for interbank payments. In this setting, nominal demand contracts do not decentralize the first-best. In fact, other market arrangements could be superior in terms of welfare. Furthermore, state-contingent deposit contracts do not expand the consumption possibility set to include the first-best. We also show that central banks cannot approximate the banking allocation to the efficient solution. Conventional monetary policy only affects inflation and has no impact on the consumption of agents, while unconventional monetary policy in the form of helicopter drops of money could generate efficient allocations for savers but not for borrowers. These results suggest that simplifying assumptions used so far in the banking literature may not be innocuous to the results in those models