Real effects of supplying safe private money

• 成果类型: Article
• 署名作者: Xu, Chenzi; Yang, He
• 署名单位: Stanford University; Centre for Economic Policy Research - UK; Amazon.com
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103868
• 发表日期: 2024
• 关键词: Private money; bank notes; Market access; Safe assets; payments; Currency

摘要

Privately issued money often bears default risk, which creates transaction frictions when used as a medium of exchange. The late 19th century US provides a unique context to evaluate the real effects of supplying a new type of money that is safe from default. We measure the local change in monetarytransaction frictions with a market access approach derived from general equilibrium trade theory. Consistent with theories hypothesizing that lowering transaction frictions benefits the traded and inputs-intensive sectors, we find an increase in traded goods production, in the share of manufacturing output and employment, and in innovation.