This essay surveys the new monetarist approach to liquidity. Work in this literature strives for
empirical and policy relevance, plus rigorous foundations. Questions include: What is …

A model of banking and means of payment is constructed to analyze the effects of the
introduction of central bank digital currency (CBDC). That CBDC is interest bearing is not an …

We develop a tractable model of banks' liquidity management with an over‐the‐counter
interbank market to study the credit channel of monetary policy. Deposits circulate randomly …

This article presents empirical evidence of a reserve-induced transmission channel of
quantitative easing to long-term interest rates. Reserve-induced effects are independent of …

In an open market operation, the central bank swaps currency for bonds. We show how
injecting money in this way is different from transfers, the way policy is usually formulated …

This paper studies a New Keynesian model with a banking system. The central bank targets
the interest rate on short safe bonds that are held by banks to back inside money and hence …

This paper studies a monetary economy with two layers of transactions. In transactions
between bank customers, households and institutional investors pay for goods and assets …

A two-sector general equilibrium banking model is constructed to study the functioning of a
floor system of central bank intervention. Only retail banks can hold reserves, and these …

The landscape of the federal funds market changed drastically in the wake of the Great
Recession as large-scale asset purchase programs left depository institutions awash with …

In response to the Great Recession, the Federal Reserve resorted to several unconventional
policies that drastically altered the landscape of the federal funds market. The current …