TY  - RPRT
        AU  - Mishra, Bineet
AU  - Prasad, Eswar
        TI  - A Simple Model of a Central Bank Digital Currency
        PY  - 2023/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16154
        UR  - https://www.iza.org/publications/dp16154
        AB  - We develop a general equilibrium model that highlights the trade-offs between physical and digital forms of retail central bank money. The key differences between cash and central bank digital currency (CBDC) include transaction efficiency, possibilities for tax evasion, and, potentially, nominal rates of return. We establish conditions under which cash and CBDC can co-exist and show how government policies can in uence relative holdings of cash, CBDC, and other assets. We illustrate how a CBDC can facilitate negative nominal interest rates and helicopter drops, and also how a CBDC can be structured to prevent capital  flight from other assets. 
        KW  - medium of exchange
KW  - cash
KW  - central bank digital currency
KW  - store of value
KW  - transaction efficiency
        ER  -