Niepelt, Dirk (November 2020). Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics (Discussion Papers 20-18). Department of Economics
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We analyze policy in a two-tiered monetary system. Noncompetitive banks
issue deposits while the central bank issues reserves and a retail CBDC. Monies
differ with respect to operating costs and liquidity. We map the framework into a
baseline business cycle model with “pseudo wedges” and derive optimal policy rules:
Spreads satisfy modified Friedman rules and deposits must be taxed or subsidized.
We generalize the Brunnermeier and Niepelt (2019) result on the macro irrelevance
of CBDC but show that a deposit based payment system requires higher taxes. The
model implies annual implicit subsidies to U.S. banks of up to 0.8 percent of GDP
during the period 1999–2017.
Item Type: |
Working Paper |
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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: |
Dino Collalti |
Date Deposited: |
12 Jan 2021 16:35 |
Last Modified: |
05 Dec 2022 15:44 |
BORIS DOI: |
10.48350/150722 |
URI: |
https://boris.unibe.ch/id/eprint/150722 |
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