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Papers by Romain Baeriswyl

SSRN Electronic Journal, 2016

While the central bank observes the market activity to assess economic fundamentals, it shapes th... more While the central bank observes the market activity to assess economic fundamentals, it shapes the market outcome through its policy interventions. The more the central bank influences the market, the more it spoils the informational content of economic aggregates. How should the central bank act and communicate when it derives its information from observing the market? This paper analyses the optimal central bank's action and disclosure under endogenous central bank's information for three operational frameworks: pure communication, action and communication, and signaling action. When the central bank takes an action, it would be optimal for the central bank to be fully opaque to prevent its disclosure from deteriorating the information quality of market outcomes. However, in the realistic case where central bank's action is observable, it may be optimal to refrain from implementing any action.

This paper argues that central banks could control consumer price inflation better by injecting m... more This paper argues that central banks could control consumer price inflation better by injecting money through lump-sum transfers to citizens, rather than by manipulating the credit market and interest rates. Lump-sum monetary transfers lead to less intersectoral distortion and less intertemporal discoordination than measures aimed at stimulating the credit market. They allow central banks to target inflation without building up financial imbalances.

REVISTA PROCESOS DE MERCADO, 2021

The 100%-Money plan advocated by Fisher (1936) has a Misesian flavor as it aims at mitigating int... more The 100%-Money plan advocated by Fisher (1936) has a Misesian flavor as it aims at mitigating intertemporal discoordination by reducing (i) the discrepancy between investment and voluntary savings, and (ii) the manipula tion of interest rates by monetary injections. Recent proposals to adopt the 100% reserve banking system, such as the Chicago Plan Revisited by Benes and Kumhof (2013) or the Limited Purpose Banking by Kotlikoff (2010), take, however, a fundamentally different attitude towards the role of the central bank in the credit market and ignore that intertemporal discoordination arises inde pendently from whether the credit expansion is financed by the creation of outside or inside money. These plans allow the central bank to inject outside money into the credit market and to effectively lower interest rates in negative territory in order to overcome the limit that the liquidity trap sets to credit expan sion in the fractional reserve system. Although such an attempt may ...