On the Equivalence of Private and Public Money

Brunnermeier, Markus K.; Niepelt, Dirk (May 2019). On the Equivalence of Private and Public Money (NBER Working Paper Series 25877). Cambridge, MA: National Bureau of Economic Research 10.3386/w25877

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We develop a generic model of money and liquidity that identifies sources of liquidity bubbles and seignorage rents. We provide sufficient conditions under which a swap of monies leaves the equilibrium allocation and price system unchanged. We apply the equivalence result to the “Chicago Plan,” cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC). In particular, we show why CBDC need not undermine financial stability.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Macroeconomics

UniBE Contributor:

Niepelt, Dirk

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

NBER Working Paper Series

Publisher:

National Bureau of Economic Research

Language:

English

Submitter:

Dino Collalti

Date Deposited:

14 Apr 2020 17:23

Last Modified:

14 Apr 2020 17:23

Publisher DOI:

10.3386/w25877

BORIS DOI:

10.7892/boris.138659

URI:

https://boris.unibe.ch/id/eprint/138659

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