We provide an in-depth study of short-term rental (STR) regulation in Chicago. While many municipalities choose between outright bans or laissez-faire strategies concerning STR activities, Chicago pioneered a middle-ground ordinance, enabling the market to exist with limitations and...

We consider how a central bank digital currency (CBDC) could transform all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy. In particular, we find that CBDC can serve as a practically costless medium of exchange, secure store of value, and...

Empirically observed intertemporal choices about money have long been thought to exhibit present bias, i.e. higher short-term compared to long-term discount rates. Recently, this view has been called into question on both empirical and theoretical grounds, and a spate of recent findings suggest...

We study a natural experiment in which debit cards are rolled out to beneficiaries of a cash transfer program, who already received transfers directly deposited into a savings account. Using administrative account data and household surveys, we find that before receiving debit cards, few...

Modern technology provides the basis of an efficient low-cost electronic payments as an alternative to the current system where fiat money is the medium of exchange. This paper explores possible macro-economic implication, showing how such a financial system might enhance government's ability to...

We rely on economic theory to discuss how blockchain technology will shape innovation in digital platforms. We identify two key costs affected by the technology: 1) the cost of verification; and 2) the cost of networking. The first cost relates to the ability to cheaply verify the attributes of...

In October 2014, all 4,494 undergraduates at the Massachusetts Institute of Technology were given access to Bitcoin, a decentralized digital currency. As a unique feature of the experiment, students who would generally adopt first were placed in a situation where many of their peers received...

Central banking in an age of digital currencies is a fast-developing topic in monetary economics. Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the marketplace may pressure central banks to pursue tighter...

Can competition among privately issued fiat currencies such as Bitcoin or Ethereum work? Only sometimes. To show this, we build a model of competition among privately issued fiat currencies. We modify the current workhorse of monetary economics, the Lagos-Wright environment, by including...

Despite advances in transactions technologies, paper currency still constitutes a notable percentage of the money supply in most countries. For example, it constitutes roughly 10% of the US Federal Reserve's main monetary aggregate, M2. Yet, it has important drawbacks. First, it can help...