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On Digital Currencies
Uhlig, Harald - National Bureau of Economic Research - 2024
I discuss private and central-bank-issued digital currencies, summarizing my prior research. I argue that prices of private digital currencies such as bitcoin follow random walks or, more generally, risk-adjusted martingales. For central bank digital currencies, I argue that they enhance the...
Persistent link: https://www.econbiz.de/10014486250
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Fiscal Consequences of Central Bank Losses
Cecchetti, Stephen G.; Hilscher, Jens - National Bureau of Economic Research - 2024
In response to the Global Financial Crisis, central banks engaged in large-scale asset purchases funded by the issuance of reserves. These "unconventional" policies continued during the pandemic, so that by 2022 central banks' balance sheets had grown up to ten-fold. As a result of rapidly...
Persistent link: https://www.econbiz.de/10014544756
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Quantifying the Costs and Benefits of Quantitative Easing
Levin, Andrew T.; Lu, Brian L.; Nelson, William R. - National Bureau of Economic Research - 2022
We conduct a systematic analysis of the costs and benefits of large-scale securities purchases, using the Federal Reserve's QE4 program as a concrete example. This program was initiated at the onset of the pandemic in March 2020 and continued for two years, leading to a doubling of the Fed's...
Persistent link: https://www.econbiz.de/10013477241
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How Abundant Are Reserves? Evidence from the Wholesale Payment System
Afonso, Gara; Duffie, Darrell; Rigon, Lorenzo; Shin, … - National Bureau of Economic Research - 2022
Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments in order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with abundant reserve balances, we show that outgoing...
Persistent link: https://www.econbiz.de/10013477228
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Fiscal Histories
Cochrane, John H. - National Bureau of Economic Research - 2022
The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of real primary surpluses. Monetary policy remains important. The central bank can set an interest rate target, which determines the path of expected inflation, while news about the...
Persistent link: https://www.econbiz.de/10013361983
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Who Invests in Crypto? Wealth, Financial Constraints, and Risk Attitudes
Aiello, Darren; Baker, Scott; Balyuk, Tetyana; Di … - National Bureau of Economic Research - 2023
We provide a first look into the drivers of household cryptocurrency investing. Analyzing consumer transaction data for millions of U.S. households, we find that, except for high income early adopters, cryptocurrency investors resemble the general population. These investors span all income...
Persistent link: https://www.econbiz.de/10014436987
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Central Bank Digital Currencies, an Old Tale With a New Chapter
Bordo, Michael D.; Roberds, William - National Bureau of Economic Research - 2022
We consider the debut of a new monetary instrument, central bank digital currencies (CBDCs). Drawing on examples from monetary history, we argue that a successful monetary transformation must combine microeconomic efficiency with macroeconomic credibility. A paradoxical feature of these...
Persistent link: https://www.econbiz.de/10013477201
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Anatomy of a Run : The Terra Luna Crash
Liu, Jiageng; Makarov, Igor; Schoar, Antoinette - National Bureau of Economic Research - 2023
wiped out $50 billion in valuation. At the center of the collapse was a run on a blockchain-based borrowing and lending … protocol (Anchor) that promised high yields to its stablecoin (UST) depositors. Using detailed data from the Terra blockchain …, 2022, other large traders followed. Blockchain technology allowed investors to monitor each other's actions and amplified …
Persistent link: https://www.econbiz.de/10014250177
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Monetary-Based Asset Pricing : A Mixed-Frequency Structural Approach
Bianchi, Francesco; Ludvigson, Sydney C.; Ma, Sai - National Bureau of Economic Research - 2022
We integrate a high-frequency monetary event study into a mixed-frequency macro-finance model and structural estimation. The model and estimation allow for jumps at Fed announcements in investor beliefs, providing granular detail on why markets react to central bank communications. We find that...
Persistent link: https://www.econbiz.de/10013210100
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Inflation Past, Present and Future : Fiscal Shocks, Fed Response, and Fiscal Limits
Cochrane, John H. - National Bureau of Economic Research - 2022
Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional views that inflation will surge without swift rate rises....
Persistent link: https://www.econbiz.de/10013210124