We analyze the impact of introducing a central bank-issued digital currency (CBDC) on the operational framework of monetary policy and the macroeconomy as a whole. To this end, we develop a New Keynesian model with heterogeneous banks, a frictional interbank market, a central bank with deposit...

This paper presents novel causal evidence on the relationship between various communication channels employed by central banks and households' expectations about future inflation. In a pre-registered randomized survey experiment administered in 2022, we examine adjustment of inflation...