This paper modifies a Townsend turnpike model by letting agents stay at a location long enough to trade some consumption loans, but not long enough to support a Pareto optimal allocation. Monetary equilibria exist that are non-optimal in the absence of a scheme to pay interest on currency at a particular rate. Paying interest on currency at the optimal rate delivers a Pareto optimal allocation,...

This paper examines the link between currency unions and customs unions. The size of a bloc of countries practising some form of co-ordination of monetary policy is limited by the incentive to free-ride that formation of the bloc creates. However, when the threat of a trade war is introduced, the stable size of the bloc increases. This suggests that a) large currency areas are more likely to em...

Implementation and collapse of exchange rate pegging schemes are recurrent events. A currency crisis is often followed by an economic downturn while pegging often begets a boom. In this paper I study why a benevolent central bank should pursue a monetary policy that leads to those recurrent currency crises and subsequent periods of pegging. I show that the optimal policy induces a competitive e...

Timeliness is one of the major dimensions in the field of data quality. Freshness or obsoleteness of data is determined by timeliness data quality dimension. Generally, timeliness is calculated by currency and volatility. Currency is calculated by age, delivery time and input time. On the other side, volatility of data is the duration of the validity of data. Currency and volatility of IMS depe...

This paper addresses two questions: (i) how do governments actually pay for the Þscal costs associated with currency crises; and (ii) what are the implications of different Þnancing methods for post-crisis rates of inßation and depreciation? We study these questions using a general equilibrium model in which a currency crisis is triggered by prospective government deÞcits. We then use our model...

The paper develops a theory that endogenizes the currency composition of international nominal bond portfolios in general equilibrium. It emphasizes the critical roles of government debt and of government policies, and thereby reconnects to the partial equilibrium portfolio balance literature of the 1980s. Consistent with recent empirical findings, optimal private sector foreign currency positi...

This paper presents a general equilibrium currency crisis model of the ’third generation’, in which the possibility of currency crises is driven by the interplay between private Þrms’ credit-constraints and nominal price rigidities. Despite our emphasis on microfoundations, the model remains sufficiently simple that the policy analysis can be conducted graphically. The analysis hinges on four m...

Bitcoin has demonstrated there are many security improvements applicable to normal currency. As the human race expands and we colonize other planets, we have to consider how we are going to extend integral parts of of society, and that includes our currency system. Information transferring does not scale well with very large distances, entirely due to physical limitations. For example, there is...

This paper investigates the relative role of price discovery between two long-term swap contracts that exchange U.S. dollars for Japanese yen – the cross-currency basis swap and the foreign exchange (FX) swap – using structural state space models. Our main findings are that: (i) the currency swap market plays a much more dominant role in price discovery than the FX swap market; and (ii) FX swap...

The digital currency Bitcoin has had remarkable growth since it was first proposed in 2008. Its distributed nature allows currency transactions without a central authority by using cryptographic methods and a data structure called the blockchain. In this paper we use the no-cloning theorem of quantum mechanics to introduce Quantum Bitcoin, a Bitcoinlike currency that runs on a quantum computer....