C5 - Econometric Modeling

• CBDC in the Market for Payments at the Point of Sale: Equilibrium Impact and Incumbent Responses

  Staff Working Paper 2024-52 Walter Engert, Oleksandr Shcherbakov, André Stenzel

  We simulate introducing a central bank digital currency (CBDC) and consider consumer adoption, merchant acceptance and usage at the point of sale. Modest adoption frictions significantly inhibit CBDC market penetration along all three dimensions. Incumbent responses to restore pre-CBDC market shares are moderate to small and further reduce the impact of a CBDC.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C5, C51, D, D1, D12, E, E4, E42, L, L1, L14, L5, L52

• Bouncing Back: How Mothballing Curbs Prices

  Staff Working Paper 2024-51 Thibaut Duprey, Artur Kotlicki, Daniel E. Rigobon, Philip Schnattinger

  We investigate the macroeconomic impacts of mothballed businesses—those that closed temporarily—on sectoral equilibrium prices after a negative demand shock. Our results suggest that pandemic fiscal support for temporary closures may have eased inflationary pressures.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Firm dynamics, Fiscal policy, Inflation and prices JEL Code(s): C, C5, C55, C8, C81, D, D2, D22, E, E3, E32

• The impact of a central bank digital currency on payments at the point of sale

  Staff Analytical Note 2024-27 Walter Engert, Oleksandr Shcherbakov, André Stenzel

  We simulate the impact of a central bank digital currency (CBDC) on consumer adoption, merchant acceptance and use of different payment methods. Modest frictions that deter consumer adoption of a CBDC inhibit its market penetration. Minor pricing responses by financial institutions and payment service providers further reduce the impact of a CBDC.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C5, C51, D, D1, D12, E, E4, E42, L, L1, L14, L5, L52