Monetary Policy Implementation: A Microstructure Approach

  title={Monetary Policy Implementation: A Microstructure Approach},
  author={Perry Mehrling and Neil T. Skaggs},
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… Expand

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