Cryptocurrencies: A Crash Course in Digital Monetary Economics

13 Pages Posted: 30 Nov 2018

See all articles by Jesús Fernández-Villaverde

Jesús Fernández-Villaverde

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

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Date Written: December 2018

Abstract

This article reviews what cryptocurrencies are, and it frames them within the context of historical monetary experiences and contemporary monetary economics. The article argues that, as pure fiduciary private money, cryptocurrencies are a bubble without a fundamental value and 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 fiduciary monies.

Suggested Citation

Fernández-Villaverde, Jesús, Cryptocurrencies: A Crash Course in Digital Monetary Economics (December 2018). Australian Economic Review, Vol. 51, Issue 4, pp. 514-526, 2018. Available at SSRN: https://ssrn.com/abstract=3293186 or http://dx.doi.org/10.1111/1467-8462.12306

Jesús Fernández-Villaverde (Contact Author)

University of Pennsylvania - Department of Economics ( email )

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