Macro Lit Review 4: Highlights from Mid-2023 with George Selgin
Macro Musings with David Beckworth
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The Fed's Flooding of Settlement Balances Reserves Kills the Overnight Interbank Market
The old system allowed a scarce reserve system to allow a small quantity of reserves. Now we're discovering that if you don't have that market, by gosh, because of distributional issue,. it takes a heck of a lot of reserves to make up for an efficient overnight interbank unsecured lending market. I think this is a very good situation from a political economy perspective and now is the time to think about whether something should be done about it.
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