Broadening Narrow Money: Monetary Policy with a Central Bank Digital Currency

Jack Meaning, Ben Dyson, James Barker and Emily Clayton
Additional contact information
Jack Meaning: Bank of England
Ben Dyson: Bank for International Settlements Innovation Hub
James Barker: Bank of England
Emily Clayton: Bank of England

International Journal of Central Banking, 2021, vol. 17, issue 2, 1-42

Abstract: This paper discusses central bank digital currency (CBDC) and its potential impact on the monetary transmission mechanism. We first offer a general definition of CBDC which should make the concept accessible to a wide range of economists and policy practitioners.We then investigate how CBDC could affect the various stages of transmission, from markets for central bank money to the real economy. We conclude that monetary policy would be able to operate much as it does now, by varying the price or quantity of central bank money. Transmission may even be strengthened for a given change in policy instruments.

JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2021:q:2:a:1

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