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What is Payment on Reserves Process?
The payment on reserve process proposed by Robert Hall and Ricardo Reis is a way of remunerating reserves which would give the central bank...
What is the Saturated Level of Reserves?
The Saturated Level of Reserves or efficient level of reserves, is the point which the opportunity cost for banks to hold reserves disappears, and became indifferent towards holding more reserves. The reserve demand curve beyond this point becomes close to horizontal.
Central Bank’s Balance Sheet and the Rise of Reserves
The above figure shows the balance sheet of four major central banks from 2005 to 2015. Above the horizontal axis is the asset side...