Monetary economics and policy: a foundation for modern currency systems

Table of contents:
Preface
Part I Currency and Money
Introduction
1 The Value of Currency
1.1 Introduction
1.2 Outline of the Results
1.3 Model
1.3.1 Consumers
1.3.2 Government
1.3.3 Equilibrium
1.4 Determining the Value of the Currency
1.4.1 The Fiscal Theory of the Price Level
1.4.2 Central Bank Theory of the Price Level
1.5 Holding Gold
1.6 References
2 Cash as a Medium of Exchange
2.1 Introduction
2.2 Outline of the Results
2.3 Model
2.3.1 Consumers
2.3.2 Government
2.3.3 Equilibrium
2.3.4 Seigniorage
2.4 Price Determination through the Interest Rate Policy
2.5 Price Determination through Money Aggregates
2.6 The Gold Standard
2.7 Optimal Policy
2.8 Cryptocurrency Competition
2.8.1 Only Government Money is Used
2.8.2 Both Types of Moneys are Used
2.8.3 Only Private Money is Used
2.8.4 Launching a Fully Backed Cryptocurrency
2.9 References
3 Central Bank Digital Currency
3.1 Introduction
3.2 Outline of the Results
3.3 Model
3.3.1 Consumers
3.3.2 Government
3.3.3 Equilibrium
3.4 Price Determination
3.5 Optimal Liquidity Policy
3.6 References
4 Private Money
4.1 Introduction
4.2 Outline of the Results
4.3 Model
4.3.1 Consumers
4.3.2 Government
4.3.3 Intermediaries
4.3.4 Equilibrium
4.4 The Supply of Public and Private Liquidity
4.5 Dominant Currency
4.6 References
Part II Stabilization Policies
Introduction
5 The Benchmark New Keynesian Model
5.1 Introduction
5.2 Outline of the Results
5.3 Model
5.3.1 Households
5.3.2 Firms
5.3.3 Government
5.4 Equilibrium with Flexible Prices
5.5 Price Rigidities
5.5.1 Equilibrium with Price Rigidities
5.5.2 Log-linear Approximation
5.6 References
6 An AS-AD Graphical Analysis
6.1 Introduction
6.2 Outline of the Results
6.3 Productivity Shock
6.3.1 A Temporary Productivity Shock
6.3.2 A Permanent Productivity Shock
6.3.3 Optimism or Pessimism on Future Productivity
6.4 Markup Shock
6.5 Public Spending Shock
6.6 Preference Shock
6.7 Disanchoring of Price Expectations
6.8 References
7 Inflation Targeting as an Optimal Policy
7.1 Introduction
7.2 Outline of the Results
7.3 Optimal Policy under Commitment
7.4 Optimal Policy under Discretion
7.5 Interest Rate Rules
7.6 Optimal Inflation Target
7.7 References
8 NK Model with a Banking Sector
8.1 Introduction
8.2 Outline of the Results
8.3 Model
8.3.1 Banking Model
8.3.2 Households
8.3.3 Firms
8.3.4 Government
8.4 Equilibrium
8.5 Log-linear Approximation
8.6 Optimal Policy
8.7 References
Part III Crisis Models
Introduction
9 Liquidity Trap
9.1 Introduction
9.2 Outline of the Results
9.3 Helicopter Money
9.3.1 Helicopter Money Coordinated by Monetary and Fiscal Policy
9.3.2 Helicopter Money by Central Bank Only
9.4 Unconventional Monetary Policy
9.4.1 Irrelevance of Unconventional Open Market Operations
9.4.2 Relevance of Unconventional Open Market Operations
9.5 Forward Guidance
9.6 Managing the Central Bank’s Reserves
9.7 Other Channels for Unconventional Monetary Policies
9.8 References
10 Deleveraging and Credit Crunch
10.1 Introduction
10.2 Outline of the Results
10.3 Debt Deleveraging
10.4 The Credit Crunch
10.5 A General Framework
10.6 References
11 Shortage of “Safe Assets”
11.1 Introduction
11.2 Outline of the Results
11.3 Model
11.3.1 Consumers
11.3.2 Financial Intermediaries
11.3.3 Government
11.4 Equilibrium with the Government Satiating Liquidity
11.5 Equilibrium with No Frictions in the Supply of Private Safe Assets
11.6 Equilibrium with Frictions in the Supply of Private Safe Assets
11.7 Government Intervention
11.7.1 Government Policy with a Limit on Taxes
11.7.2 Regulation of Intermediaries’ Investments
11.7.3 General Discussion
11.8 References
Part IV Inflation
Introduction
12 The Inflation-Unemployment Trade Off
12.1 Introduction
12.2 Outline of the Results
12.3 Natural Rate of Unemployment
12.4 Keynesian Unemployment
12.5 Short-Run Non-neutralities
12.6 Persistent Monetary Non-neutralities
12.7 An L-Shaped New Keynesian Phillips Curve
12.8 References
13 Hyperinflation
13.1 Introduction
13.2 Outline of Results
13.3 Deficit Financing and Inflation
13.3.1 Money-Financed Real Fiscal Deficit
13.3.2 Money-Financed Nominal Fiscal Deficit
13.3.3 … with Interest Rate Policies
13.4 Some Unpleasant Monetarist Arithmetic
13.4.1 Tight Money Paradox
13.5 Central Bank’s Balance Sheet and Inflation
13.6 References
Part V Conclusion
The Future of Monetary Policy
Part VI Appendix
Appendix to Chapter 1
A Derivation of Equation (1.5)
Appendix to Chapter 2
B Derivation of Equation (2.4)
Appendix to Chapter 3
C Derivation of Equation (3.4)
Appendix to Chapter 5
D Derivation of Equations (5.3) and (5.4)
E Derivation of the Log-linear Approximations of Sections 5.5.2 of Chapter 5
Appendix to Chapter 7
F Derivations of the Loss Function (7.1)
G Conditions for Determinacy
Appendix to Chapter 8
H Derivations of Approximations (8.22) and (8.23).
I Derivations of the Loss Function (8.27)
Bibliography
Index

[https://press.princeton.edu/books/hardcover/9780691262642/monetary-economics-and-policy?srsltid=AfmBOoobBzoBnwaJJmf6QfoNlLKQG6TBz8Z5f4KAggummrAMntcYc1fP]

Over the past two decades, monetary policy has been deployed in unprecedented ways, as central banks attempted to mitigate the adverse consequences of the 2007–2008 financial crisis, the COVID-19 global lockdown, and recent inflationary surges. In Monetary Economics and Policy, Pierpaolo Benigno offers a new way to understand the potency and effectiveness of monetary policy, presenting a unified modeling framework to analyze policy challenges posed by both paper and digital currency systems. He investigates current theoretical and policy controversies, drawing connections with historical themes in monetary economics.

Benigno examines how central banks control the value of their currency amid competition from cryptocurrencies and private money-like securities; discusses the desirability of inflation targeting for macroeconomic stabilization; and explores theoretical grounds for the unconventional monetary policies seen in the recent period of zero nominal interest rates, including forward guidance, quantitative and credit easing, and helicopter money. He accompanies his analysis with an innovative visual representation of the New Keynesian model and inflation-targeting policies.

Benigno’s novel framework also allows the study of monetary policy normalization through quantitative tightening toward what has become the “new normal.” He discusses the optimal provision of liquidity and the different roles of the government and financial intermediaries. Finally, he recounts historical controversies regarding the inflation-unemployment trade-off to understand the 2020s inflationary surge and delves into the causes and dynamics of hyperinflations, tracing them to the subtle, ambiguous linkages between monetary and fiscal policy and weak balance-sheet conditions for the central bank.

(https://press.princeton.edu/books/hardcover/9780691262642/monetary-economics-and-policy?srsltid=AfmBOoobBzoBnwaJJmf6QfoNlLKQG6TBz8Z5f4KAggummrAMntcYc1fP)