On the Equivalence of Private and Public Money

Markus Brunnermeier and Dirk Niepelt

No 25877, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a generic model of money and liquidity that identifies 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.

JEL-codes: E40 E41 E42 E44 E51 E52 E58 G21 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pay
Note: AP CF IFM ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (172)

Published as Markus K. Brunnermeier & Dirk Niepelt, 2019. "On the Equivalence of Private and Public Money," Journal of Monetary Economics, .

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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)
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