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Monetary policy implications of digital money

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  • Berentsen, Aleksander

Abstract

The term digital money refers to various proposed electronic payment mechanisms designed to use by consumers to make retail payments. These mechanisms are based either on smart cards or on network money. Smart cards could potentially replace currency as the predominant means to pay for retail purchases. Software-based digital money products (network money) bring cheap electronic funds transfers to individuals and small firms. This paper examines how digital money affects the demand for money and how this process, in turn, affects the demand for reserves, monetary control, and the monetary transmission mechanism.

Suggested Citation

  • Berentsen, Aleksander, 1997. "Monetary policy implications of digital money," MPRA Paper 37392, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37392
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    References listed on IDEAS

    as
    1. Shouyong Shi & Mariana Rojas Breu & Aleksander Berentsen, 2009. "Liquidity and Growth," 2009 Meeting Papers 590, Society for Economic Dynamics.
    2. Ian Grigg, "undated". "The Effect of Internet Value Transfer Systems on Monetary Policy," Working Papers _001, London Business School.
    3. Joseph Bisignano, 1996. "Varieties of monetary operating procedures: balancing monetary objectives with market efficiency," BIS Working Papers 35, Bank for International Settlements.
    4. Baltensperger, Ernst, 1980. "Alternative approaches to the theory of the banking firm," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 1-37, January.
    5. Santomero, Anthony M & Seater, John J, 1996. "Alternative Monies and the Demand for Media of Exchange," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 942-960, November.
    6. Claudio E. V. Borio, 1997. "Monetary policy operating procedures in industrial countries," BIS Working Papers 40, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Digital Money; Monetary Policy;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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