Monetary Policy in a World Without Money

47 Pages Posted: 20 Aug 2000 Last revised: 18 Dec 2022

See all articles by Michael Woodford

Michael Woodford

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Date Written: August 2000

Abstract

This paper considers whether the development of electronic money' poses any threat to the ability of central banks to control the value of their national currencies through conventional monetary policy. It argues that even if the demand for base money for use in facilitating transactions is largely or even completely eliminated, monetary policy should continue to be effective. Macroeconomic stabilization depends only upon the ability of central banks to control a short-term nominal interest rate, and this would continue to be possible, in particular through the use of a channel' system for the implementation of policy, like those currently used in Canada, Australia and New Zealand.

Suggested Citation

Woodford, Michael, Monetary Policy in a World Without Money (August 2000). NBER Working Paper No. w7853, Available at SSRN: https://ssrn.com/abstract=239608

Michael Woodford (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

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