On the Equivalence of Private and Public Money

Markus Brunnermeier and Dirk Niepelt

No 13778, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a generic model of money and liquidity that identites sources of liquidity bubbles and seignorage rents. We provide sufficient conditions under which a swap of monies leaves the equilibrium allocation and price system unchanged. We apply the equivalence result to the "Chicago Plan," cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC). In particular, we show why CBDC need not undermine financial stability.

Keywords: Money creation; Monetary system; Inside money; Outside money; Equivalence; Cbdc; Chicago plan; Sovereign money (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (172)

Downloads: (external link)
https://cepr.org/publications/DP13778 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: On the equivalence of private and public money (2019)
Working Paper: On the Equivalence of Private and Public Money (2019)
Working Paper: On the Equivalence of Private and Public Money (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13778

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13778

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().