Monetary policy operations affect bank balance sheets (BBSs). This study develops a balance sheet model to examine the impacts of monetary policy operations on banks’ ability to supply funds. That ability is assessed using the balance sheet capacities provided by regulatory risk management...

In this study, the author demonstrates that the selection of an appropriate money-demand function is crucial to ascertain the relationship between fiscal deficits and inflation. To do so, the author incorporates a Selden-Latané money-demand function into a micro-founded extension of the model...

The purpose of this article is to explore the role of artificial intelligence, or AI, in a central bank digital currency project and its challenges. Artificial intelligence is transforming the digital finance landscape. Central bank digital currency is also transforming the nature of central...

The banking sector plays a pivotal role in the economic development and stability of a country, particularly in developing nations like India, where financial systems are predominantly bank-based. Banks act as primary financial intermediaries, converting deposits into productive investments,...

You stand at the forefront of a transformative era, propelled by the rapid advancement of artificial intelligence. This guide will illuminate the strategies necessary for navigating the intricate landscape of an economy increasingly shaped by intelligent systems. By embracing adaptability and...

This note takes part in the debate on the topic “a macroeconomics without LM”. It shows that, when the central bank does not control directly the interest rates on the money and financial markets, LM curve has another role to play than to determine in an endogenous way the money supply when...

The mainstream inflation-targeting literature makes the strong assumption that the central bank can exactly target the interest rate which affects investment and consumption decisions and hence the money supply plays no role in the monetary policy strategy. This assumption is equivalent to...

This paper compares monetary policy in the US and EMU during the last decade, employing an estimated hybrid New Keynesian cash-in-advance model, driven by five shocks. It appears that the difference between the two monetary policies between 1998 and 2006 is due to both surprises in productivity...

The aim of this paper is to explore the determinants of currency crises and to illustrate the dynamic behaviour of the fundamental macroeconomic variables in a small open economy under a peg regime. The mainstream models in currency crises literature are not sufficiently available to explain the...

Current macro-economic textbooks provide a fatally misleading description of the money supply process in modern economies. Over the past 20 years Post Keynesian authors have established conclusively that despite strictly-enforced cash reserve requirements, changes in the supply of bank deposits...