Monetary Policy Implementation: A Microstructure Approach

Abstract

In classic central banking theory, the ‘discount house’ played a central role (Bagehot, 1873, Sayers, 1976). 1 As holders of short-term commercial bills, the discount houses financed the holding of goods on their way from producers to consumers, and, in turn, financed themselves primarily by borrowing from banks. Just so, an expansion of trade went hand in hand with an expansion of both the assets and liabilities of the discount houses, and also an expansion of both the assets and liabilities of the banking system. Looking through the balance sheet relationships, it was clear to observers that the expansion of trade was financed by an expansion of bank money, meaning the deposit liabilities of the banking system. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 9 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.