Topic:Money, Bitcoin, and Monetary Policy
Speaker:Seungduck Lee,Sungkyunkwan University
Time:Tuesday,Oct. 29, 13:30-15:00
Location:Room 217, Guanghua Building 2
We develop a search theoretic model where both money and Bitcoin can be used as a medium of exchanges, and currency choices are endogenously determined. Quantitative analysis shows that Bitcoin can meaningfully compete with money only We develop a search theoretic model where money and Bitcoin can be used as a medium of exchanges, and study the conditions necessary for the coexistence of the two currencies. Quantitative analysis shows that Bitcoin can meaningfully compete with money only when inflation is sufficiently high, and that welfare in an economy with both money and Bitcoin is lower than that in a money only economy due to the inefficient mining process of Bitcoins. The welfare gap between the two economies expands as inflation rises. An increase in transaction fees for Bitcoins can increase welfare by reducing inefficient Bitcoin transactions.
Seungduck Lee is an assistant Professor at the department of Economics, Sungkyunkwan University. He was an economist at the Bank of Korea before joining Sungkyunkwan University. His research interests are monetary economics and monetary policy. He is also interested in financial markets with frictions such as over-the-counter markets. His study currently focuses more on Central Bank Digital Currency and Cryptocurrency as well. Seungduck Lee obtained his Ph.D. in Economics from University of California, Davis, in 2017.
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