Institutions of Foreign Exchange Settlement in a Two-Country Model
Fujiki (2003) extends the Freeman (1996) model to show that when combined, an elastic money supply in the foreign exchange market and an elastic money supply in the domestic credit market yield efficiency gains in monetary equilibrium. This paper discusses whether three other institutional designs could achieve the same improvement in efficiency: (1) a private arrangement based on a payment versus a payment settlement standard supported by central banks' free intraday credit, (2) a financial institution that provides a negotiable certificate of deposit, and (3) a currency union.
Year of publication: |
2006
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Authors: | Fujiki, Hiroshi |
Published in: |
Journal of Money, Credit and Banking. - Blackwell Publishing. - Vol. 38.2006, 3, p. 697-719
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Publisher: |
Blackwell Publishing |
Saved in:
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