Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228906
Authors: 
Niepelt, Dirk
Year of Publication: 
2020
Series/Report no.: 
Discussion Papers No. 20-18
Abstract: 
We analyze policy in a two-tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies differ with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with "pseudo wedges" and derive optimal policy rules: Spreads satisfy modified Friedman rules and deposits must be taxed or subsidized. We generalize the Brunnermeier and Niepelt (2019) result on the macro irrelevance of CBDC but show that a deposit based payment system requires higher taxes. The model implies annual implicit subsidies to U.S. banks of up to 0:8 percent of GDP during the period 1999{2017.
Subjects: 
Reserves
deposits
central bank digital currency
monetary policy
Friedman rule
equivalence
Ramsey policy
bank profits
money creation
JEL: 
E42
E43
E51
E52
Document Type: 
Working Paper

Files in This Item:
File
Size
745.93 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.