On the Equivalence of Private and Public Money

Markus Brunnermeier and Dirk Niepelt

No 19.05, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: We develop a generic model of money and liquidity that identifies sources of liquidity bubbles and seignorage rents. We provide suffcient 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.

Pages: 29 pages
Date: 2019-06
New Economics Papers: this item is included in nep-pay
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Citations: View citations in EconPapers (172)

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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)
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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