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Author
Date
2022-09Type
- Journal Article
ETH Bibliography
yes
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Abstract
Can democratic currency issuance lead to welfare-optimal results/stable currency values? We explore (crypto-)currency issuance with flexible majority rules. With flexible majority rules, the vote-share needed to approve a particular currency issuance growth is increasing with this growth rate. By choosing suitable flexible majority rules, socially optimal growth rates can be achieved in simple settings. By adding a communication stage, in which agents can reveal their preferences for currency growth, the voting process can be ended in three rounds. With other procedures, one could even obtain the first-best solution in one voting round. Finally, we show that optimal money growth rates are realized if agents entering financial contracts anticipate ensuing inflation rates determined by these flexible majority rules. Show more
Permanent link
https://doi.org/10.3929/ethz-b-000585512Publication status
publishedExternal links
Journal / series
Digital FinanceVolume
Pages / Article No.
Publisher
SpringerSubject
Digital currency; Central bank; Voting; Majority rule; Flexible majority rulesOrganisational unit
03729 - Gersbach, Hans / Gersbach, Hans
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ETH Bibliography
yes
Altmetrics