Standing Facilities Versus Open Market Operations: Equivalence Results

Alessandro Marchesiani () and Aleksander Berentsen

No 929, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: In this paper we compare two mechanisms for implementing monetary policy: standing facilities and open market operations. We show that any equilibrium allocation that can be attained with open market operations can be replicated with standing facilities, but that the converse is not true. Furthermore, the set of equilibrium allocations that can be attained with standing facilities is weakly dominated in terms of welfare by the set of equilibrium allocations that can be attained with open market operations. However, if the central bank chooses the optimal policy for each mechanism, the allocations are equivalent.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2010/paper_929.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed010:929

Access Statistics for this paper

More papers in 2010 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().