The Richmond Fed’s new Economic Quarterly reviews the literature on the role of the central bank’s discount window as an instrument of a lender of last resort policy. Richmond Fed Economist Huberto Ennis focuses on general equilibrium rationalizations of the policy using formal economic models.
For each of the main papers in the literature, Ennis describes the model and the main mechanisms at play. He synthesizes the literature by identifying common features across models and some lessons that may be useful for policymaking.
This article and others in the latest issue of Economic Quarterly are available on our website.
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The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. More information is available at (800) 322-0565 or online.
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.