When central banks pay interest on reserves — as the Federal Reserve has done since October 2008 and as is standard operating procedure today — does financing fiscal stimulus by permanently expanding …
Online FirstJournal of Money, Credit and BankingOnline 23 Jun 2025
Does fiscal stimulus still work when it is financed through a banking system that is undercapitalized and holds large quantities of risky domestic government bonds? This was a first-order policy …