The optimal quantity of CBDC in a bank-based economy by Lorenzo Burlon, Manuel A. Muñoz, and Frank Smets
By: Burlon, Lorenzo
.
Contributor(s): Muñoz, Manuel A | Smets, Frank.
Material type: 
ArticleSubject(s): MACROECONOMIA | POLITICA MONETARIA | EURO DIGITAL | PRESTAMOS | PRODUCTO INTERIOR BRUTO
In:
American Economic Journal : Macroeconomics v. 16, n. 4, October 2024, p. 172-217.Summary: We show that the estimated effect of digital euro news on bank stock valuations and lending depends on the bank's deposit reliance and the central bank digital currency (CBDC) design features. Using a quantitative DSGE model calibrated to the euro area economy that replicates such evidence, we find that CBDC issuance yields nontrivial welfare trade-offs between, on one side, the positive expansion of liquidity services and the improved stabilization of deposit funding and lending and, on the other side, a negative bank disintermediation effect. The optimal amount of CBDC lies between 15 and 45 percent of quarterly GDP.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 2137/2024/4-3 (Browse shelf) | Available | OP 2137/2024/4-3 |
Bibliografía
We show that the estimated effect of digital euro news on bank stock valuations and lending depends on the bank's deposit reliance and the central bank digital currency (CBDC) design features. Using a quantitative DSGE model calibrated to the euro area economy that replicates such evidence, we find that CBDC issuance yields nontrivial welfare trade-offs between, on one side, the positive expansion of liquidity services and the improved stabilization of deposit funding and lending and, on the other side, a negative bank disintermediation effect. The optimal amount of CBDC lies between 15 and 45 percent of quarterly GDP.
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