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Biais, Bruno
, Rochet, Jean-Charles and Villeneuve, Stéphane
(2025)
Do cryptocurrencies matter?
TSE Working Paper, n. 25-1643, Toulouse
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Abstract
In our dynamic general equilibrium model, agents can invest in money and in a production technology exposed to shocks. If the government is non-benevolent and has a monopoly over money issuance it issues too much money, to finance excessive public expenditures. We study the effects of a cryptocurrency in limited supply but with crash risk. If the crash risk is not too large, competition from the cryptocurrency constrains the government’s monetary policy. If the government is non-benevolent, this constraint improves citizens welfare, but if the government is rather benevolent competition from the cryptocurrency can lower citizens’ welfare.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | May 2025 |
| Place of Publication: | Toulouse |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 23 May 2025 08:19 |
| Last Modified: | 06 Nov 2025 10:32 |
| OAI Identifier: | oai:tse-fr.eu:130554 |
| URI: | https://publications.ut-capitole.fr/id/eprint/50857 |
