Crowding out in a Dual Currency Regime? Digital versus Fiat Currency

KiHoon Hong (), Kyounghoon Park and Jongmin Yu ()
Additional contact information
KiHoon Hong: College of Business, Hongik University
Jongmin Yu: School of Economics, Hongik University

No 2017-13, Working Papers from Economic Research Institute, Bank of Korea

Abstract: In this paper, we analyse 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 only occurs 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.

Keywords: Bitcoin; Digital currency; Dual currency; Crowding out (search for similar items in EconPapers)
JEL-codes: E00 E41 E42 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-04-24
New Economics Papers: this item is included in nep-ict, nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://papers.bok.or.kr/RePEc_attach/wpaper/english/wp-2017-13.pdf Working Paper, 2017 (application/pdf)

Related works:
Journal Article: Crowding Out in a Dual Currency Regime? Digital Versus Fiat Currency (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:bok:wpaper:1713

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