Elgar Encyclopedia of Central Banking

Edited by Louis-Philippe Rochon, Full Professor, Laurentian University, Canada, Editor-in-Chief, Review of Political Economy and Founding Editor Emeritus, Review of Keynesian Economics and Co-Director Monetary Policy Institute and Sergio Rossi, Full Professor of Economics, University of Fribourg, Switzerland

• ContentsList of contributors xvIntroduction xxi100% money 1Jonathan MassonnetAfrican Monetary Union 3Salewa ‘Yinka OlawoyeAmsterdamse Wisselbank 4Dirk BezemerAsset management 5Neil M. LancastleAsset-price inflation 7David ColanderAsset-based reserve requirements 9Aleksandr V. GevorkyanBagehot rule 11Thorvald Grung MoeBagehot, Walter 12Andrea Pacella and RiccardoRealfonzoBancor 14Pietro AlessandriniBank Act of 1844 15Xavier BradleyBank capital and the newcredit multiplier 17Yannis Panagopoulos andAristotelis SpiliotisBank deposit insurance 19Claudia MayaBank deposits 20Oliver Simon BaerBank for International Settlements 21Felix MallinBank money 23Oliver Simon BaerBank of Canada 24Mario SeccarecciaBank of England 26Philip ArestisBank of Italy 28Alessandro CaianiBank of Japan 29Takashi YagiBank run 31Virginie MonvoisinBanking and Currency Schools 33Stefano FigueraBanking supervision 34Ruxandra PavelchieviciBanque de France 36Claude GnosBarings Bank 38Robert H. KoehnBasel Agreements 39Fernando J. Cardim de CarvalhoBernanke, Ben Shalom 41Jamie Morgan and Brendan SheehanBiddle, Nicholas 42Nathaniel ClineBIS macro-prudential approach 44Ivo MaesBitcoin 46Edoardo Beretta and Roberto GoriniBlack hole 48Wesley C. MarshallBretton Woods regime 49Omar F. HamoudaBRICS common currency 51Sergio RossiBubble 52Alicia GirónBubble Act 53William E. McCollochBullionist debates 54Lefteris TsoulfidisBurns, Arthur Frank 56James ForderCapital controls 59Kevin P. GallagherCapital flight 60Emiliano LibmanCapital requirements 62Fabio S. PanzeraCarney, Mark 63Jim StanfordCarry trade 65Daniela GaborCash 67Oliver Simon BaerCentral bank as fiscal agentof the Treasury 69Eric TymoigneCentral bank bills 70Aleksandr V. GevorkyanCentral bank credibility 72Emmanuel CarréCentral bank digital currencies 74Vadim Grishchenko andVasily TkachevCentral bank independence 76Arne HeiseCentral bank money 78Andrea TerziCentral banking and financial stability 80Sergio RossiCentral banking and power 81Guillaume ValletCentral banking and socialconflict 83David M. FieldsCentral banking, race and gender 85Clara Zanon BrenckCentral banks and thezero-carbon transition 87Robert GuttmannChartalism 89Charles Albert Eric GoodhartChicago Plan 92Jonathan MassonnetClassical dichotomy 93David M. FieldsClearing system 95Edoardo BerettaClimate change and financialinstability 96Giada ValsangiacomoCollateral 98Vera DianovaCommodity money 99Aris Papageorgiou andLefteris TsoulfidisConsumer price indices 101James ForderContagion 102Sebastian WeyihContested terrain 104Gerald EpsteinConvertibility law 106Juan Matías De LucchiCore inflation 107Vidhura S. TennekoonCorridor and floor systems 109Andrea TerziCost channel of monetary policy 110Antonino LofaroCOVID-19 and central bank responses 112Salewa ‘Yinka OlawoyeCredibility and reputation 113Dany LangCredit bubble 114Steve KeenCredit creation 116Richard A. WernerCredit divisor 118Greg HanngsenCredit easing 120Richard A. WernerCredit guidance 122Richard A. WernerCredit rationing 124Arne HeiseCross-border retail banking 126Harald SanderCryptocurrencies 128Edoardo Beretta and Roberto GoriniCurrency board 129Jean-François PonsotCurrency crisis 131Brenda Spotton VisanoCurrency hierarchy 133Eric TymoigneDe-dollarization 135Sergio RossiDebasement 136Lefteris TsoulfidisDebt crisis 137Brenda Spotton VisanoDebt deflation 138Steve KeenDecoupling 140Zoltán SzalaiDeleveraging 141Domenica TropeanoDeutsche Bundesbank 142Jörg BibowDevelopment banks 145Wesley C. MarshallDigital dollar 146Jörg BibowDigital euro 148Giuseppe MastromatteoDigital pound 150Plamen Ivanov andRichard A. WernerDigital yuan 153Hui YuanDollar hegemony 155David M. FieldsDollarization 157Mehdi Ben Guirat andLouis-Philippe RochonDraghi, Mario 158Stefano LucarelliEffective lower bound 161Fabio S. PanzeraEfficient markets theory 162Robert W. DimandEmergency liquidity assistance 164Andrea CarreraEndogenous money 165Giancarlo BertoccoEnvironmental change and theinternational lender of last resort 167Basil OberholzerEuro-area crisis 169Sergio RossiEuropean monetary union 170Claude GnosExchange-rate interventions 172Alexander MihailovExchange-rate pass-through 174Carlos SchönerwaldExchange-rate targeting 176Luigi VentimigliaFear of floating 178Juan Barredo ZuriarrainFederal Open Market Committee 179Daniel H. NeilsonFederal Reserve System 181Ruxandra PavelchieviciFiat money 183Edward J. NellFinance and economic growth 185Eckhard HeinFinancial bubble 186Fabio S. PanzeraFinancial crisis 188Robert GuttmannFinancial deregulation 190Eugenia CorreaFinancial innovation 192Daniela TavasciFinancial instability 193Fabio S. PanzeraFinancial instability hypothesis 195Jan ToporowskiFinancial integration 197Marco Veronese PassarellaFinancial literacy 198Robert H. ScottFinancial repression 200Juan Matías De LucchiFinancial supervision 201Fabio S. PanzeraFinancial transactions tax 203Noemi Levy-OrlikFinancialization 205.zgür OrhangaziFirst and Second Banks ofthe United States 207Jane KnodellFisher effect 208Angel AsensioFlow of funds 210Eugenio Caverzasi and Antoine GodinForward guidance 211Vera DianovaFractional reserve banking 213Giancarlo BertoccoFree banking 214Stefano FigueraFriedman rule 216Alexander MihailovGibson’s paradox 219Alejandro FioritoGlass–Steagall Act 220Aldo BarbaGoodhart, Charles 222Daniyal KhanGoodhart’s law 224Charles Albert Eric GoodhartGreedflation 225Sergio RossiGreen currency 226Wesley C. MarshallGreen finance 227Basil OberholzerGreenbacks 229Robert W. ParenteauGreenspan, Alan 231Jamie Morgan and Brendan SheehanGresham’s law 232Mario SeccarecciaHayek, Friedrich Augustus von 235Maria Alejandra Caporale MadiHigh-powered money 236Maria Alejandra Caporale MadiHousing bubble 238Theodore KoutsobinasHume, David 240Nathan TankusHyperinflation 241Esteban Pérez CaldenteyImmaculate disinflation 244Nathaniel Cline and Nathan PerryImpossible trinity 245Ricardo SummaInconvertibility 247Nikolay NenovskyIneffectiveness of monetary policy 249Louis-Philippe RochonInflation 250Alvaro CenciniInflation – conflict 252Ettore GalloInflation-first policy 253Guillermo MatamorosInflation measurement 255Sergio RossiInflation targeting 257Sergio RossiInflation targeting andincome distribution 258Sylvio Antonio KappesIngot Plan 260Germán D. FeldmanInside and outside money 261James Andrew FelkersonInterdependence of moneydemand and supply 263Duccio CavalieriInterest rate pass-through 264Natalia AndriesInterest rate rules – parking-itapproach 266Louis-Philippe RochonInterest rate rules – post-Keynesian 267Mark SetterfieldInterest rates setting 269Angel AsensioInterest rates term structure 271James Andrew FelkersonInternational gold standard 272Ramaa VasudevanInternational Monetary Fund 274Eugenio CaverzasiInternational reserves 276Jean-François PonsotInternational settlement institution 277Sergio RossiInvestment banking 279Jamie Morgan and Brendan SheehanKansas City rule 281Eric TymoigneKemmerer, Edwin Walter 282Rebeca Gomez BetancourtKeynes as monetary adviser 284Anna CarabelliKeynes as monetary theorist 286Luca Fantacci and MariaCristina MarcuzzoKeynes Plan 287Mario CedriniKing, Mervyn 289Olivier GiovannoniLagarde, Christine 292Andrea CarreraLamfalussy, Alexandre 293Ivo MaesLavoie, Marc 294Louis-Philippe RochonLaw, John 296Nikolay NenovskyLender of last resort 297Domenica TropeanoLiability management 299Maria Alejandra Caporale MadiLIBOR 301Alexis StenforsLiquidity trap 302Sheila C. DowLocal complementary currencies 304Guillaume ValletLong-term refinancing operations 306Benjamin Schmidt and Peter SpahnMacroeconomic regulations 308Jonathan MassonnetMacro-prudential policies 309Fabio S. PanzeraMacro-prudential tools 311Helene SchuberthMarket neutrality 313Zoltán SzalaiMarx, Karl 315William E. McCollochMerchant banks 316Marcelo MilanMetallism 318Devin T. RaffertyMinsky moment 319Helene SchuberthMinsky, Hyman Philip 321Marco Veronese PassarellaModern Money Theory 323Eugenio Caverzasi and Antoine GodinModigliani–Miller theorem 325Tracy MottMonetarism 326Alvaro CenciniMonetary aggregates 328Jonathan MassonnetMonetary approach to thebalance of payments 330Alexander MihailovMonetary circuit 332Louis-Philippe RochonMonetary circuit – French 334Maurizio SolariMonetary circuit – Italian 336Riccardo RealfonzoMonetary circuit – quantum 338Sergio RossiMonetary History of theUnited States, 1867–1960 340Ruxandra PavelchieviciMonetary policy anddigital currencies 341Giuseppe MastromatteoMonetary policy and ecologicalconcerns 344Basil OberholzerMonetary policy and exchange rates 345Fernanda Ultremare and Alex WilhansAntonio PalludetoMonetary policy and functionaldistribution of income 347Guillermo MatamorosMonetary policy andincome distribution 349Pierre MonninMonetary policy in a smallopen economy 351Etelberto OrtizMonetary policy indicators 352Theodore KoutsobinasMonetary policy andinherent biases 354Louis-Philippe RochonMonetary policy and secularstagnation 355Maurizio SolariMonetary policy and socialresponsibility 357Louis-Philippe Rochon andGuillaume ValletMonetary policy and structuralchange 359Antonino LofaroMonetary policy and wealthdistribution 361Omar F. HamoudaMonetary policy and zombiecorporations 363Wesley C. MarshallMonetary policy dominance 364Louis-Philippe RochonMonetary policy implementation 366Sylvio Antonio KappesMonetary policy implementationin Argentina 367Ariel Dvoskin and Emiliano LibmanMonetary policy implementationin Australia 369Peter DochertyMonetary policy implementationin Brazil 371Sylvio Antonio KappesMonetary policy implementationin Canada 372Guillermo MatamorosMonetary policy implementationin China 374Hui YuanMonetary policy implementationin India 375Sunanda SenMonetary policy implementationin Japan 377Richard A. WernerMonetary policy implementationin Nigeria 379Salewa ‘Yinka OlawoyeMonetary policy implementationin Poland 380Zbigniew PolańskiMonetary policy implementationin Russia 382Vadim Grishchenko, Vasily Tkachev,and Grigory ZhirnovMonetary policy implementationin Switzerland 384Sergio RossiMonetary policy implementationin the euro area 386Eladio Febrero and Jorge UxóMonetary policy implementationin the USA 387Roy J. RotheimMonetary policy in the eraof digital innovation 389Valerii Borisov and Vasily TkachevMonetary policy instruments 392Maria Alejandra Caporale MadiMonetary policy objectives 393Nathan PerryMonetary policy transmissionchannels – neoclassical 395Emmanuel CarréMonetary policy transmissionchannels – post-Keynesian 397Eladio Febrero and Jorge UxóMonetary sovereignty 399Daniyal KhanMonetary targeting 401Helene SchuberthMonetary theory of distribution 402Massimo PivettiMoney and credit 404Antoine GodinMoney creation 406Bernard VallageasMoney creation and economicgrowth 407Mathias BinswangerMoney doctors 409Eric HelleinerMoney illusion 410Giuseppe Mastromatteo andAdelmo TedeschiMoney multiplier 412John SmithinMoney neutrality 414Angel AsensioMoney supply 415Jo Michell and EngelbertStockhammerMoore, Basil John 417Louis-Philippe RochonNarrow banking 419William MilesNational Banking Acts 420Nathaniel ClineNatural rate of interest 422Jonathan MassonnetNegative rate of interest 423Fabio S. PanzeraNorges Bank 425Thorvald Grung MoeNorman, Montagu 426Robert W. ParenteauOpen-market operations 429Nathan PerryOpen-mouth operations 430Vijayaraghavan RamananOperation Twist 432Tracy MottOptimal international currencyreserves 433Mehdi Ben GuiratOptimum currency area 435Annina Kaltenbrunner andEngelbert StockhammerOriginal sin 436Jean-François PonsotOutput gap 438Gilberto Libanio and MarcoFlávio ResendeOutright monetary transactions 439Vincent Grossmann-WirthPadoa-Schioppa, Tommaso 442Fabio MasiniPandemic Emergency PurchaseProgramme (PEPP) 443Riccardo ZoleaPasinetti index 445Sylvio Antonio KappesPasinetti rule 446Sylvio Antonio KappesPatinkin, Don 447Esteban Pérez CaldenteyPeople’s Bank of China 449Gilberto LibanioPhillips curve 451Malcolm SawyerPolicy rates of interest 452Vera DianovaPowell, P. Jerome 454Jörg BibowPrebisch, Raúl 456Esteban Pérez CaldenteyPrice-level targeting 458Emmanuel CarréProfit inflation 459Maurizio SolariPublic liquidity backstop 462Andrea CarreraPurpose of central banks 463Jane KnodellQuantitative easing 466Brian K. MacLeanQuantitative easing in Japan 467Richard A. WernerQuantitative easing variationsand applications 470Richard A. WernerQuantity theory of credit 472Richard A. WernerQuantity theory of money 474Giuseppe Mastromatteo andAdelmo TedeschiQuantum macroeconomics 477Alvaro CenciniQuesnay, Pierre 478Muriel Dal-Pont Legrand andDominique TorreRandom walk 481Neil M. LancastleReal-balance effect 482Jonathan MassonnetReal bills doctrine 483Philip PilkingtonReflux mechanism 485Vijayaraghavan Ramanan andLouis-Philippe RochonReichsbank 487Richard A. WernerRepurchase agreement 489Philip PilkingtonReserve Bank of India 491Suranjana Nabar-BhaduriReserve currency 493Salewa ‘Yinka OlawoyeReserve requirements 494James Andrew FelkersonRicardo, David 496John E. KingRist, Charles 498Dominique TorreRobinson, Joan 499Louis-Philippe RochonRules versus discretion 501Dany LangSchacht, Hjalmar Horace Greeley 504Edoardo BerettaSchmitt, Bernard 505Alvaro CenciniSellers’ inflation 507Ettore GalloSettlement balances 508Vidhura S. TennekoonSettlement system 510Vidhura S. TennekoonShadow banking 511Wesley C. MarshallSmithin rule 513John SmithinSovereign lending 515Aldo BarbaStable coins 517Edoardo Beretta and RobertoGoriniState Bank of Pakistan 518Daniyal KhanState money 520Jonathan MassonnetSterilization 522Daniela GaborStrong, Benjamin 523Slim ThabetSudden stops 525Daniela Tavasci and LuigiVentimigliaSveriges Riksbank 526Elias BengtssonSwap 527Benoît NguyenSwiss National Bank 529Sergio RossiSystemically important financialinstitutions 530Oliver Simon BaerTARGET2 system 533Sergio RossiTaylor rule 534Peter KrieslerThornton, Henry 536Aldo BarbaTime inconsistency 538Angel AsensioTobin tax 540Slim ThabetTriffin dilemma 541Jörg BibowTriffin, Robert 543Esteban Pérez CaldenteyTwin crises 545William MilesUsury laws 547Mohamed Aslam andMarie-Aimee TourresVolcker experiment 549Giuseppe Mastromatteo andGiovanni Battista PittalugaVulture fund 550David PringleWage–price spiral 553Alexandre Le Bloc’hWhite, Harry Dexter 554Juan Barredo ZuriarrainWicksell, Knut 556Jonathan MassonnetWIR 557Guillaume ValletYield curve 560Edward J. NellYield curve control 562Kristóf LehmannZero-interest-rate policy 564Philip PilkingtonZero lower bound 565Vera Dianova

‘When Diderot and d’Alembert published their encyclopedia three centuries ago, they aimed to bring together the best knowledge on the most critical topics of their society, and to promote the dissemination of knowledge to as many people as possible. Without a doubt, this Encyclopedia is part of this tradition. The best central banking specialists address the various concepts, notions, theories, facts, and institutions associated with central banking in a clear, relevant, and rigorous manner. A must read, definitely.’