Autori
Nicolini, Juan Pablo
Teles, Pedro
Marinon, Ramon

Titolo
Electronic money: sustaining low inflation?
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1998 - Fascicolo: 15 - Pagina iniziale: 1 - Pagina finale: 32

We analyze the impact of electronic money competition on policy outcomes. We consider different assumptions regarding the objectives of the central bank and its ability to commit to future policies. Electronic money competition can discipline a revenue maximizing government and result in lower equilibrium inflation rates, even when there is imperfect commit merit. The efficient Friedman rule is only implemented if the government maximizes welfare. However electronic money competition may result in the Friedman rule being non credible. We also show how an independent choice of the reserve requirements can be an effective policy rule to enhance the disciplinary role of electronic money competition.



Testo completo: http://www.iue.it/ECO/WP-Texts/98_15.pdf

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