@TechReport{dp-578,
    author        = {Homburg, Stefan},
    astring       = {Stefan Homburg},
    title         = {Pure Theory of the Federal Funds Rate},
    month         = {August},
    year          = {2016},
    pages         = {11},
    size          = {112},
    number        = {578},
    language      = {en},
    keywords      = { Federal funds rate; term structure of interest rates; excess reserves; money multiplier; zero lower bound.},
    jelclass      = {E43, E51, E58, G01},
    abstract      = {The effective federal funds rate is determined in a competitive interbank market, while the target federal funds rate represents a policy variable. This paper proposes a theory of the determination of the effective funds rate. According to the main result, the latter is a Lagrange multiplier that vanishes if excess reserves emerge. This is exactly what happened in the United States in September 2008. A final section considers interest on reserves.}
}