Crowding Out in a Dual Currency Regime? Digital Versus Fiat Currency

KiHoon Hong, Kyounghoon Park and Jongmin Yu

Emerging Markets Finance and Trade, 2018, vol. 54, issue 11, 2495-2515

Abstract: In this article, we analyze a dual currency regime with fiat currency and digital currency and investigate potential crowding-out effects of fiat currency or digital currency under the framework of the traditional monetary economic model. We find that crowding out occurs only under extreme assumptions, i.e., extremely high costs associated with the use (medium of exchange and store of value) of one currency and extremely low costs associated with the use of the other currency.

Date: 2018
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Working Paper: Crowding out in a Dual Currency Regime? Digital versus Fiat Currency (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:54:y:2018:i:11:p:2495-2515

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DOI: 10.1080/1540496X.2018.1452732

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