What makes e-money more special than cash? Is the introduction of e-money necessarily welfare enhancing? Is an e-money system necessarily stable? What is the optimal way to design an efficient and stable e-money scheme? This paper provides a first attempt to develop a micro-founded, dynamic,...

Recent years have witnessed the advances of e-money systems such as Bitcoin, PayPal and various forms of stored-value cards. This paper adopts a mechanism design approach to identify some essential features of different payment systems that implement and improve the constrained optimal resource...

Money creation began before the loan activities of the goldsmith-bankers in seventeenth-century London, in the form of coin clipping, coin debasement, and so on. However, money creation as we know it today (new bank loans create new bank deposits, which is the dominant means of payments) began...

This paper contributes to the micro-foundation of money in centralized markets with idiosyncratic uncertainty. It shows existence of stationary monetary equilibria and ensures that there is an optimum quantity of money. The rational solution of our model is compared with actual behavior in a...

This paper investigates whether the quantity theory of money is still alive. We demonstrate three insights. First, for countries with low inflation, the raw relationship between average inflation and the growth rate of money is tenuous at best. Second, the fit markedly improves, when correcting...

Das heutige Kreditgeldsystem wird von Kritikern zunehmend infrage gestellt. Vertreter von Vollgeld und Full Reserve Banking postulieren, dass die dezentrale Giralgeldschöpfung der Banken destruktive Boom-Bust-Zyklen, finanzielle Instabilitäten sowie strukturelle Verschuldungs- und...

Nachdem eine Bargeldabschaffung schon vor längerem u.a. von Wissenschaftsvertretern wie Rogoff, Summers und Bofinger diskutiert und im Ergebnis befürwortet wurde, scheint das Thema aufgrund aktueller Entwicklungen sowie bereits vollzogener Maßnahmen verstärkt in Wissenschaft und Praxis...

This paper outlines a model of the first true central bank, the Bank of Amsterdam, founded in 1609. Employing a variant of the Freeman (1996) model of money and payments, we first analyze the problematic monetary situation in the Netherlands prior to the founding of the Bank. We then use the...

The subprime financial crisis has forced several North American and European central banks to take extraordinary measures and to modify some of their operational procedures. These changes have made even clearer the deficiencies and lack of realism in mainstream monetary theory, as can be found...