Swiss Economicblogs.org
UniBe Discussion Paper 22-12, October 2022. PDF. We analyze retail central bank digital currency (CBDC) in a two-tier monetary system with bank deposit market power and externalities from liquidity transformation. Resource costs of liquidity provision determine the optimal monetary architecture and modified Friedman (1969) rules the optimal monetary policy. Optimal interest rates on reserves and CBDC differ. A calibration for the U.S. suggests a weak case for CBDC in the baseline but a...
Read More »“Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics,” CEPR, 2020
CEPR Discussion Paper 15457, November 2020. PDF (local copy). 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...
Read More »“Kosten und Nutzen eines Vollgeldsystems (Costs and Benefits of `Sovereign Money’),” ifoSD, 2018
ifo Schnelldienst 16/2018, August 23, 2018. PDF.
Read More »“Kosten und Nutzen eines Vollgeldsystems (Costs and Benefits of `Sovereign Money’),” ifoSD, 2018
ifo Schnelldienst 16/2018, August 23, 2018. PDF.
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