Economic Quarterly

June 11, 2010

Special Issue of the Richmond Fed's Economic Quarterly Surveys the Diamond-Dybvig Model of Bank Fragility and its Implications for Current Banking and Monetary Policy

Richmond, Va.

This special issue of Economic Quarterly is devoted to Douglas Diamond and Philip Dybvig's seminal 1983 article on bank fragility and banking regulation, which continues to provide insights for today's policymakers and researchers. The articles in this issue explore the influence of Diamond and Dybvig’s article on subsequent economic research, extend our understanding of current financial phenomena, and examine how the model might be used to evaluate new regulations and banking policies.

You can find the full text of this article and others in the latest issue of Economic Quarterly at:

In the First Quarter 2010 issue:

  • Introduction to the Special Issue on the Diamond-Dybvig Model by Edward Simpson Prescott
  • Bailouts by Edward J. Green
  • On the Fundamental Reasons for Bank Fragility by Huberto M. Ennis and Todd Keister
  • Inside-Money Theory after Diamond and Dybvig by Ricardo de O. Cavalcanti
  • Monetary Theory and Electronic Money: Reflections on the Kenyan Experience by William Jack, Tavneet Suri, and Robert Townsend

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Research Department—Publications at (800)322-0565.

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.


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