Discussion Paper

No. 2019-49 | September 10, 2019
The e-monetary theory


The author develops a dynamic model with two types of electronic money: reserves for transactions between bankers and zero-maturity deposits for transactions in the non-bank private sector. Using this model, he assesses the efficacy of unconventional monetary policy since the Great Recession. After quantitative easing, keeping the interest on reserves near zero too long might create deflation. The central bank can safely get out of the “low rate-cum-deflation” trap by “raising rate and raising money supply”.

JEL Classification:

E4, E5


  • Downloads: 327


Cite As

Duong Ngotran (2019). The e-monetary theory. Economics Discussion Papers, No 2019-49, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2019-49

Comments and Questions

Anonymous - Referee Report 1
October 07, 2019 - 09:59

see attached file