TY  - BOOK
AU  - Benigno,Pierpaolo
AU  - Schilling,Linda M.
AU  - Uhlig,Harald
ED  - National Bureau of Economic Research.
TI  - Cryptocurrencies, Currency Competition, and the Impossible Trinity
T2  - NBER working paper series
PY  - 2019///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - August 2019; Hardcopy version available to institutional subscribers
N2  - We analyze a two-country economy with complete markets, featuring  two national currencies as well as a global (crypto)currency.  If the global currency is used in both countries, the national nominal interest rates must be equal  and the exchange rate between the national currencies is a risk- adjusted martingale. We call this result Crypto-Enforced Monetary Policy Synchronization (CEMPS).  Deviating from interest equality risks approaching the zero lower bound or the abandonment of the national currency. If the global currency is backed by interest-bearing assets, additional and tight restrictions on monetary policy arise.  Thus, the classic Impossible Trinity becomes even less reconcilable
UR  - https://www.nber.org/papers/w26214
UR  - http://dx.doi.org/10.3386/w26214
ER  -