COVID-19 has temporarily changed the relative cost and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. For...

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic risk externalities. It focuses on the relative merit of price versus quantity rules, showing how they target different incentives for risk creation. When banks differ in credit...

We analyze the political economy of monetary unification among countries with different quality of institutions. Countries with stronger institutions have lower public spending and better productive incentives, even under a stronger currency. Governments under weaker institutions spend more and...