Central Bank Digital Currencies (CBDCs) enable negative interest rates. A game is analyzed between a central bank (accounting for the government’s interest) and a representative household choosing to consume, hold CBDC, or hold non-CBDC. The central bank chooses negative interest rate when it...

For one variable-supply currency in isolation, one player's Cobb-Douglas utility depends on the current supply divided by the initial supply, multiplied by the inverse of the accumulative inflation/deflation. With equal weight assigned to both factors, money printing outweighs inflation, and...

The Taylor (1993) rule for determining interest rates is generalized to account for three additional variables: The money supply, money velocity, and the unemployment rate. Thus, five parameters, i.e. weights assigned to the deviation in the inflation rate, the deviation in real GDP (Gross...