Cryptocurrencies: A Crash Course in Digital Monetary Economics

24 Pages Posted: 24 Sep 2018

See all articles by Jesús Fernández-Villaverde

Jesús Fernández-Villaverde

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 3, 2018

Abstract

This paper reviews what cryptocurrencies are, and it frames them within the context of historical monetary experiences and contemporary monetary economics. The paper argues that, as pure duciary private money, cryptocurrencies are a bubble without a fundamental value and that they will not provide, in general, optimal amounts of money or deliver price stability. Nevertheless, cryptocurrencies can play a role in improving the current means of payments and in disciplining central banks into providing better government-run duciary monies.

Keywords: Private money, currency competition, cryptocurrencies, monetary policy

JEL Classification: E40, E42, E52

Suggested Citation

Fernández-Villaverde, Jesús, Cryptocurrencies: A Crash Course in Digital Monetary Economics (September 3, 2018). PIER Working Paper No. 18-023. Available at SSRN: https://ssrn.com/abstract=3253248 or http://dx.doi.org/10.2139/ssrn.3253248

Jesús Fernández-Villaverde (Contact Author)

University of Pennsylvania - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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