Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204929
Authors: 
Brunnermeier, Markus Konrad
Niepelt, Dirk
Year of Publication: 
2019
Series/Report no.: 
Discussion Papers 19-03
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.
Subjects: 
Money creation
monetary system
inside money
outside money
equivalence
CBDC
Chicago Plan
sovereign money
Document Type: 
Working Paper

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