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Central Bank Digital Currency And The Future Of Monetary Policy

Michael Bordo () and Andrew Levin ()

No 17104, Economics Working Papers from Hoover Institution, Stanford University

Abstract: We consider how a central bank digital currency (CBDC) can transform all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy. Drawing on a very long strand of literature in monetary economics, we find a compelling rationale for establishing a CBDC that serves as a stable unit of account, a practically costless medium of exchange, and a secure store of value. In particular, the CBDC should be universally accessible and interest-bearing, and the central bank should adjust its interest rate to foster true price stability.

Keywords: monetary policy frameworks; payment technologies; simple rules. (search for similar items in EconPapers)
JEL-codes: B12 B13 B22 E42 E52 E58 E63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-mac, nep-mon and nep-pay
Date: 2017-04
References: View references in EconPapers View complete reference list from CitEc
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