| Περίληψη : | In 2008 the Fed, following the example of many other central banks, began paying interest on required and excess reserves thus establishing a corridor system for implementing monetary policy for the first time in its history. Despite the fact that corridor systems are an integral part of the operating procedures central banks use to implement monetary policy, their theoretical study in general equilibrium models is limited. The first such analysis is due to Berentsen and Monnet (Berentsen and Monnet 2008) and in part 3 of this dissertation I present their analysis. A fundamental result obtained by their model is that when a central bank operates a corridor system, interest rate rules do not completely determine the monetary policy stance. Instead, a complete characterization of monetary policy stance requires an interest rate corridor rule. Also, given that the most basic property of a corridor system is that the interbank rate is constrained to move within the corridor formed by the deposit rate and the lending rate it is an interesting empirical observation that no central bank in the world operates a corridor system with a zero width. This is despite the fact that, in principle, this would allow central banks to control the interbank rate most effectively. The analysis presented in part 3 can explain this puzzling fact. In the first part of this dissertation I present a number of reasons that led the Fed, the ECB, the BoE and other central banks to consider and ultimately adopt corridor systems: from promoting market efficiency to concerns regarding the ability of central banks to influence the economy due to the steady decline of reserve requirements. In the case of the Fed the financial turmoil also played an important part in its decision to implement monetary policy through a corridor framework. Deposit facilities that pay interest on reserves are now part of most central banks’ “exit” strategies, i.e. strategies that will allow central banks to exit the current accomodative stance in a smooth manner. I also present a non-technical discussion of how corridor systems work in principle, along with potential problems that sometimes arise in practice that may limit their actual effectiveness. There are two features present in all corridor systems: the central bank operates one lending facility that banks and other depository institutions can use to borrow funds from the central bank at some lending rate specified by the central bank, and one deposit facility that they can use to deposit funds and earn a (lower) deposit rate. Part 2 of this dissertation is a presentation of a partial equilibrium analysis due to Whitesell (Whitesell 2006) that demonstrates concretely how the existence of lending and borrowing facilities affect the interbank rate.
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