Central Bank Digital Currency and the Effective Lower Bound

Michael Pirgmann

Disertační práce

Abstract:

Most advanced economies are currently in various stages of evaluating the implementation of Central Bank Digital Currencies (CBDC). However, the impact of introducing a retail CBDC on the Effective Lower Bound (ELB) remains largely unexplored. This research develops an analytical framework for analyzing CBDC design attributes that influence the ELB. Additionally, it proposes normalized weighted factor scores to determine the influence of costs, security, transparency, and overall preferences in determining the relative demand for cash and CBDCs. Economic agents’ sentiment was captured through two consumer surveys among two representative groups of 525 and 1,050 EU citizens. Findings suggest a broad resistance to giving up physical currency with clear privacy and security concerns about the implementation of the Digital Euro (DE) as the European version of a CBDC. For a cash-only regime, the results of this research indicate more room beyond the -1% mark for unconventional policy than that which has been experienced in the past. But this research also suggests that introducing a non-interest-bearing cash-like CBDC might move the ELB interest rates closer to zero by 0.25 %, diminishing monetary policy stimulus in crises.

Keywords

Central Bank Digital Currencies, CBDC, Effective Lower Bound, ELB, Zero Lower Bound, ZLB, Negative Interest Rate Policy, NIRP

Jazyk práce: angličtina

Datum vytvoření / odevzdání či podání práce: 11. 7. 2024

Obhajoba závěrečné práce

• Obhajoba proběhla 26. 8. 2024
• Vedoucí: doc. Mgr. Ing. Petr Wawrosz, Ph.D.
• Oponent: doc. Ing. Jan Mertl, Ph.D., prof. Ing. Mansoor Maitah, Ph.D. et Ph.D., doc. Ing. Milan Paták, CSc.

Vysoká škola finanční a správní

Doktorský studijní program / obor:
Finance / Finance