On the Equivalence of Private and Public Money

Markus Brunnermeier and Dirk Niepelt

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

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.

Keywords: Money creation; monetary system; inside money; outside money; equivalence; CBDC; Chicago Plan; sovereign money (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-dge, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (168)

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https://repec.vwiit.ch/dp/dp1903.pdf (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp1903

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