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Keywords:Bank notes 

Discussion Paper
Private money and reserve management in a random-matching model

In this paper, we develop a model of money and reserve-holding banks. We allow for private liabilities to circulate as media of exchange in a random-matching framework. Some individuals, which we identify as banks, are endowed with a technology to issue private notes and to keep reserves with a clearinghouse. Bank liabilities are redeemed according to a stochastic process that depends on the endogenous trades. We find conditions under which note redemptions act as a force that is sufficient to stabilize note issue by the banking sector.
Discussion Paper / Institute for Empirical Macroeconomics , Paper 128

Journal Article
Explaining the demand for free bank notes

Quarterly Review , Volume 12 , Issue Spr , Pages 21-35

Journal Article
Statement to Congress, October 8, 1998, (implications for the demand for Federal Reserve notes after the issuance of euro bank notes).

Federal Reserve Bulletin , Issue Dec , Pages 1054-1056

Working Paper
Intermediaries and payments instruments

We study an economy in which intermediaries have incentives to issue circulating liabilities as part of an equilibrium. We show that, with arbitrarily small transactions costs, only the liabilities of intermediaries will circulate, and not those of other private sector agents. Therefore, our model connects intermediation activity with the issuance of payments media, a connection that has not been made in earlier literature. We also describe conditions under which equilibrium outcomes may be volatile when private liabilities circulate. Finally, we use our model to suggest a resolution of the ...
Working Papers , Paper 2002-006

Journal Article
New $10 note to debut in early 2006

Financial Update , Volume 18 , Issue Q 4

Were U.S. state banknotes priced as securities?

This study examines the pricing of U.S. state banknotes before 1860 using data on the discounts on these notes as quoted in banknote reporters in New York, Philadelphia, Cincinnati, and Cleveland. The study attempts to determine whether these banknotes were priced consistent with their expected net redemption value - that is, as securities are. It finds that they are not. A bank's notes did have higher prices when the bank was redeeming its notes for specie than when it was not, and banknote prices generally reflected the distances necessary to travel in order to redeem the notes, with larger ...
Staff Report , Paper 344

Working Paper
A model of banknote discounts

Prior to 1863, state-chartered banks in the United States issued notes - dollar-denominated promises to pay specie to the bearer on demand. Although these notes circulated at par locally, they usually were quoted at a discount outside the local area. These discounts varied by both the location of the bank and the location where the discount was being quoted. Further, these discounts were asymmetric across locations, meaning that the discounts quoted in location A on the notes of banks in location B generally differed from the discounts quoted in location B on the notes of banks in location A. ...
Working Papers , Paper 641

Working Paper
A model of regulated private bank-note issue

A random-matching model (of money) is formulated in which there is complete public knowledge of the trading histories of a subset of the population, called banks, and no public knowledge of the trading histories of the complement of that subset, called nonbanks. Each person, whether a banker or a non banker, is assumed to have the technological capability to create indivisible, distinct and durable objects called notes. If outside money is indivisible and sufficiently scarce, then an optimal mechanism is shown to have note issue and destruction (redemption) by banks.
Working Papers , Paper 581

Conference Paper
Demandable debt as a means of payment: banknotes versus checks


Conference Paper
Private money creation and the Suffolk Banking System



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