On the Equivalence of Private and Public Money

Brunnermeier, Markus K.; Niepelt, Dirk (May 2019). On the Equivalence of Private and Public Money (Discussion Papers 19-03). Bern: Department of Economics

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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

UniBE Contributor:

Niepelt, Dirk

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

03 Sep 2020 08:41

Last Modified:

03 Sep 2020 08:41

BORIS DOI:

10.7892/boris.145889

URI:

https://boris.unibe.ch/id/eprint/145889

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