Dokument
| Titel: | Does a CBDC Reinforce Inefficiencies? |
| Autor: | Fuchs, Max |
| Veröffentlicht: | 2022 |
| URI: | https://archiv.ub.uni-marburg.de/es/2024/0736 |
| DOI: | https://doi.org/10.17192/es2024.0736 |
| ISSN: | 1867-3678 |
| DDC: | 330 Wirtschaft |
| Publikationsdatum: | 2024-01-19 |
| Lizenz: | https://creativecommons.org/publicdomain/mark/1.0 |
| Schlagwörter: |
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| CBDC, inefficiencies, welfare analysis |
Summary:
This paper examines whether a central bank digital currency (CBDC)
reinforces inefficiencies in transactions with cash. In this case, the gap between the traded quantity and the welfare-maximizing one, which arises due to discounting or a suboptimal amount of money, increases further. To get some answers, the monetary search model of Trejos and Wright (1995) is extended by a CBDC. We show that an interest-bearing CBDC reinforces inefficiencies in transactions with cash since opportunity costs for cash holders and money supply increase. Nevertheless, a CBDC is able to increase welfare as long as the share of CBDC holders is limited.
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