A Simple Model of Voluntary Reserve Targets with Tolerance Bands
简化了自愿准备金目标模型，分析目标设定与容忍带的相互作用如何导致银行间利率持续超调，并提出简单补救措施。
Abstract This paper presents a version of the model of voluntary reserve targets (VRT) developed in Baughman and Carapella (2020) simplified to have a Walrasian instead of frictional interbank market. First, the model makes transparent the role of target setting in controlling the market rate. Second, the simplicity of the model allows for an analysis of the interaction between VRT and tolerance bands, which are a common tool for controlling rate variability. We find that the persistent overshooting of interbank rates observed during the Bank of England's experiment with VRT may derive from the interaction between target setting and tolerance bands, a new explanation relative to the literature. We also suggest a simple remedy.