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When Does the Introduction of a New Currency Improve Welfare?
In recent years, cryptocurrencies such as Bitcoin have emerged, in upcoming years, corporate currencies such as Libra (Diem) and central bank digital currencies will emerge even in low-inflation developed economies. Using the dual currency search model of Kiyotaki and Wright (1993), we show how the...
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| Publicado no: | MAGKS - Joint Discussion Paper Series in Economics (Band 06-2021) |
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| Autoren: | , |
| Formato: | Artigo |
| Idioma: | inglês |
| Publicado em: |
Philipps-Universität Marburg
2021
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| Assuntos: | |
| Acesso em linha: | Texto integral em PDF |
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| Resumo: | In recent years, cryptocurrencies such as Bitcoin have emerged, in upcoming
years, corporate currencies such as Libra (Diem) and central bank digital currencies will emerge even in low-inflation developed economies. Using the dual currency search model of Kiyotaki and Wright (1993), we show how the introduction of a supplement to traditional money affects average utility. The room for a welfare improvement depends on differences in returns and costs, but, in particular, on the fraction of cash traders who will be replaced by digital money traders. |
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| Descrição Física: | 10 Seiten |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0682 |