On the equivalence of private and public money

【Author】 Brunnermeier, Markus K.; Niepelt, Dirk

【Source】JOURNAL OF MONETARY ECONOMICS

【影响因子】4.630

【Abstract】When does a swap between private and public money leave the equilibrium allocation and price system unchanged? To answer this question, the paper sets up a generic model of money and liquidity which identifies sources of seignorage rents and liquidity bubbles. We derive sufficient conditions for equivalence and apply them in the context of the "Chicago Plan", cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC). Our results imply that CBDC coupled with central bank pass-through funding need not imply a credit crunch nor undermine financial stability. (C) 2019 Published by Elsevier B.V.

【Keywords】Money creation; Monetary system; Inside money; Outside money; Equivalence; CBDC; Chicago plan; Sovereign money

【发表时间】2019 OCT

【收录时间】2022-01-02

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