Cryptocurrencies, currency competition, and the impossible trinity

• 成果类型: Article; Proceedings Paper
• 署名作者: Benigno, Pierpaolo; Schilling, Linda M.; Uhlig, Harald
• 署名单位: University of Bern; Washington University (WUSTL); Center for Economic & Policy Research (CEPR); University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2022.103601
• 发表日期: 2022
• 关键词: Currency competition; Cryptocurrency; Impossible trinity; Exchange rates; uncovered interest parity; Independent monetary policy

摘要

We analyze a two-country economy with complete markets, featuring two national currencies as well as a global (crypto)currency. If the global currency is used in both countries, the na-tional nominal interest rates must be equal and the exchange rate between the national cur-rencies is a risk-adjusted martingale. Deviation from interest rate equality implies the risk of approaching the zero lower bound or the abandonment of the national currency. We call this result Crypto-Enforced Monetary Policy Synchronization (CEMPS). If the global currency is backed by interest-bearing assets, additional and tight restrictions on monetary policy arise. Thus, the classic Impossible Trinity becomes even less reconcilable.(c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).