A Study of U.S. Monetary Policy Implementation: Demand for Reserves on a Period Average Basis

Posted: 2 Jul 2021

See all articles by Ruth Judson

Ruth Judson

Board of Governors of the Federal Reserve System

Elizabeth Klee

Board of Governors of the Federal Reserve System

Date Written: 2009

Abstract

This paper provides new estimates of banks' demand for excess reserve balances on a period average basis. Consistent with theoretical work, we find that the demand for excess depends critically on uncertainty of flows in and out of reserve accounts. We also document the variability of demand for excess reserve balances by institution size, evaluate different models for forecasting demand for excess on a period average basis, and report the forecasting performance of each of these models. Finally, we present analysis of the period of financial turmoil seen over the year since August, 2007.

Suggested Citation

Judson, Ruth A. and Klee, Elizabeth, A Study of U.S. Monetary Policy Implementation: Demand for Reserves on a Period Average Basis (2009). FEDS Working Paper No. 2009-22, Available at SSRN: https://ssrn.com/abstract=3877829

Ruth A. Judson (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Elizabeth Klee

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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