STICERD Economic Theory Seminars
Private vs Public Currency
Jean-Charles Rochet (Toulouse School of Economics), joint with B. Biais (HEC Paris), J.C. Rochet (TSE) and S.Villeneuve (TSE)
Thursday 21 May 2026 15:30 - 17:00
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Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.
About this event
We examine the equilibrium impact of a private currency competing with official money in a standard continuous time model with financial frictions. If the government is predatory and has a monopoly over money issuance, it issues too much money, in order to finance excessive public expenditures. In this context, what are the consequences of introducing a private currency in limited supply but exposed to crash risk? When crash risk is not too large, competition from the private currency constrains the government’s monetary policy. If the government is very predatory, this constraint improves citizens welfare. If the government is rather benevolent, competition from the private currency can lower citizens’ welfare.
Economic Theory Seminars are held on Thursdays in term time at 15:30-17:00, both ONLINE and IN PERSON in SAL 3.05.
Seminar organisers: Dr Paula Ferreira Onuchic and Dr Christopher Sandmann.
For further information please contact Sadia Ali: s.ali43@lse.ac.uk.
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