Bank Market Power and Central Bank Digital Currency: Theory and Quantitative Assessment

• 成果类型: Article
• 署名作者: Chiu, Jonathan; Davoodalhosseini, Seyed Mohammadreza; Jiang, Janet; Zhu, Yu
• 署名单位: Bank of Canada; Renmin University of China
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/722517
• 发表日期: 2023
• 页码: 1213-1248
• 关键词: private; prices; money

摘要

This paper develops a micro-founded general equilibrium model of payments to study the impact of a central bank digital currency (CBDC) on intermediation of private banks. If banks have market power in the deposit market, a CBDC can enhance competition, raising the deposit rate, expanding intermediation, and increasing output. A calibration to the US economy suggests that a CBDC can raise bank lending by 1.57% and output by 0.19%. These crowding-in effects remain robust, albeit with smaller magnitudes, after taking into account endogenous bank entry. We also assess the role of a non-interest-bearing CBDC as the use of cash declines.