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Physical vs digital currency: a difference that makes a difference

Author

Listed:
  • Amendola, Nicola

    (Department of Economics and Finance, Università di Roma, Tor Vergata)

  • Araujo, Luis

    (Department of Economics, Michigan State University and Sao Paulo School of Economics - FGV)

  • Ferraris, Leo

    (Department of Economics, Management and Statistics, Università di Milano-Bicocca)

Abstract

This paper compares digital and physical currency, focusing on a single intrinsic difference: digital, unlike physical currency, allows the monetary authority to trace the monetary flows in and out of the accounts. We show that this technological advance in record-keeping can be used by the monetary authority to improve upon physical currency and achieve efficiency in a wide range of circumstances.

Suggested Citation

  • Amendola, Nicola & Araujo, Luis & Ferraris, Leo, 0. "Physical vs digital currency: a difference that makes a difference," Theoretical Economics, Econometric Society.
    • Handle: RePEc:the:publsh:6479
    as

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    References listed on IDEAS

    as
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    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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