Currency Competition With Firms

Maxi Guennewig ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper analyses the consequences for monetary policy if firms issue money which generates seignorage revenues and information on consumers. I present a benchmark economy with a unique monetary equilibrium in which firms form digital currency areas if information rents are large. The central bank loses its autonomy and is forced to implement deflationary monetary policy. I extend the benchmark to show that the central bank may regain policy autonomy when firms form currency consortia with decision powers and claims on seignorage concentrated in the hands of one firm.

Keywords: Digital Currencies; Currency Competition; Seignorage Information; Facebook; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E4 E5 G2 (search for similar items in EconPapers)
Pages: 46
Date: 2022-12
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mon and nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_378

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