Is a Secondary Currency Essential? – On the Welfare Effects of a New Currency.
In: Jahrbucher fur Nationalokonomie & Statistik, Jg. 243 (2023-04-01), Heft 2, S. 153-167
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Zugriff:
The coexistence of fiat money (cash) and digital monies constitutes a system of parallel currencies as media of exchange. This paper asks whether a new (digital) currency is essential: Does a new currency allow for a better resource allocation even if a fully accepted currency is in circulation and remains in circulation? Using the dual currency search model of Kiyotaki and Wright (1993. A search-theoretic approach to monetary economics. Am. Econ. Rev. 83: 63–77), we show how the introduction of a secondary currency affects average utility. There is some scope for a welfare improvement as the welfare effect depends on differences in returns and costs, and, in particular, on the proportion of cash traders who will be replaced by digital money traders. [ABSTRACT FROM AUTHOR]
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Titel: |
Is a Secondary Currency Essential? – On the Welfare Effects of a New Currency.
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Autor/in / Beteiligte Person: | Fuchs, Max ; Michaelis, Jochen |
Zeitschrift: | Jahrbucher fur Nationalokonomie & Statistik, Jg. 243 (2023-04-01), Heft 2, S. 153-167 |
Veröffentlichung: | 2023 |
Medientyp: | academicJournal |
ISSN: | 0021-4027 (print) |
DOI: | 10.1515/jbnst-2022-0054 |
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