Reserves for All? Central Bank Digital Currency, Deposits, and Their (Non)-Equivalence

Dirk Niepelt

International Journal of Central Banking, 2020, vol. 16, issue 3, 211-238

Abstract: This paper offers a macroeconomic perspective on the "Reserves for All" (RFA) proposal to let the general public hold electronic central bank money and transact with it. I propose an equivalence result according to which a marginal substitution of outside money (e.g., RFA) for inside money (e.g., deposits) does not affect macroeconomic outcomes. I identify key conditions for equivalence and argue that these conditions likely are violated, implying that RFA would change macroeconomic outcomes. I also relate the analysis to common arguments found in discussions on RFA and point to inconsistencies and open questions.

JEL-codes: E42 E51 E58 E61 E63 H63 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Reserves for All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence (2018)
Working Paper: Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2020:q:2:a:6

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