Everyone wants to know. So I give the answer.
Assume a reasonably democratic society which owns the hergemon fiat bank. How much should they take as profit?
I call this the ATM fee that shoppers are willing to pay, how much ATM fee for a $100 withdrawal? I think in this case, via the miracle of imaginary modelling that shoppers will pay and voters should earnh 1.5% of GDP per year in return for their semi-monopoly fiat business. I further claim the Fed cannot do much better than this. If it is done right, inflation could be kept to zero and the full 1.5% of GDP made available to rural, inbred, yokel Senators, who unfortunately, are not democratic. Hence this model must predicts inefficiencies with mal-democracy.
And that is a microfounded model!
No comments:
Post a Comment