Can introducing Central Bank Digital Currency (CBDC) improve social welfare? We construct a dual currency model to study whether introducing CBDC with a record- keeping technology can reduce tax evasion incentives, and further achieve a better al- location than in a cash-only economy. In our...

This paper examines monetary policy when interest is paid on reserves by considering the bank's asset portfolio choice. A modified money search model is constructed with idiosyncratic risk, in which a banking contract distributes currency to one type while reserves and government bonds to the...

A search theoretical model is constructed to study bank capital requirements in a perspective of inside money. In the model bank liabilities, backed by bank assets, are useful for exchange, while bank capital is not. When the supply of bank liabilities is not sufficiently large for the trading...

Can eliminating large denomination bills improve social welfare? We construct a dual currency model to study whether illegal activity can be reduced or eliminated by modifying the payment environment. In our model, there are two types of money, "coins" (small bills) and "paper money" (large...

This study investigates the economic implications of blockchain-based academic journals, proposed by the recent computer science literature, in which authors and referees are individually incentivized. We construct a model in which the journal publishes qualified papers under two types of...

Can introducing Central Bank Digital Currency (CBDC) improve social welfare? We construct a dual currency model to study whether introducing CBDC with a recordkeeping technology can reduce tax evasion incentives in cash transactions, and further achieve a better allocation than in a cash-only...