Central bank digital currency and fiscal policy in a Diamond-Dybvig Model
After introducing digital currency, the central bank emerges as a monopolist bank. It then faces an “impossible trinity”. To achieve price stability and financial stability, optimal consumption allocation is sacrificed. In this paper, I show that fiscal policy designed in coordination with the centr...
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| Format: | Article |
| Language: | English |
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Elsevier
2023-01-01
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| Series: | Journal of Government and Economics |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2667319323000320 |