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We study how the introduction of a central bank-issued digital currency affects interest rates, the level of economic activity, and welfare in an environment where both central bank money and private bank deposits are used in exchange. Banks in our model are financially constrained, and the...
Persistent link: https://www.econbiz.de/10012058995
We analyze retail central bank digital currency (CBDC) in a two-tier monetary system with bank deposit market power and externalities from liquidity transformation. Resource costs of liquidity provision determine the optimal monetary architecture and modified Friedman (1969) rules the optimal...
Persistent link: https://www.econbiz.de/10013440005
complement—a digital euro—becomes increasingly necessary. Accordingly, the article concludes that the ECB is both entitled and … obliged de lege lata to issue a digital euro on the basis of Article 128 TFEU. It further explains that neither tangible cash … nor a digital euro can simultaneously be used as instruments in themselves to maintain price stability …
Persistent link: https://www.econbiz.de/10013230072
The aim of this paper is to analyze the demand of both traditional and new media of exchange – as cryptocurrencies and central bank digital currencies – proposing a novel specification of the demand for money. In this specification, the medium of payment (MOP) has three properties: the first...
Persistent link: https://www.econbiz.de/10012907412
The market for cryptoassets has exploded in size in the 10 years since bitcoin was launched. The technology underlying cryptoassets, blockchain, has also been held up as a technology that promises to transform entire industries. In this paper we examine what is new about cryptoassets and their...
Persistent link: https://www.econbiz.de/10011967273
Persistent link: https://www.econbiz.de/10012112413
Based on the experience of the Bank of Albania, the paper proposes a framework toestimate the interest rate lower bound in small, open, and euroized economies. The paperintroduces a stylized monitoring tool to assess the unintended consequences of low policyrates. The paper is the first attempt...
Persistent link: https://www.econbiz.de/10012922627
In July 2021 the Eurosystem decided to launch the investigation phase of the digital euro project, which aims to … provide euro area citizens with access to central bank money in an increasingly digitalised world. While a digital euro could … of uncertainty surrounding the design of a potential digital euro, its demand and the prevailing environment in which it …
Persistent link: https://www.econbiz.de/10013198349
The paper looks at the National Bank of Romania’s issue of banknotes from 1880 through 1914, highlighting the developments in the notes’ cover, the channels whereby the central bank put its notes into circulation, as well as the behaviour of the issuing house during episodes of crisis. The...
Persistent link: https://www.econbiz.de/10014080423
Austria, Finland and Sweden became members of the EU in 1995. This paper examines how support for the euro and trust in …. Support for the euro in the two euroarea members Austria and Finland has remained high and relatively stable since the … physical introduction of the new currency nearly 20 years ago, while the euro crisis significantly reduced support for the euro …
Persistent link: https://www.econbiz.de/10012269193