Assessing the Effective Lower Bound in the Context of Introducing the Digital Euro
Michael Pirgmann,
Petr Wawrosz
Abstract:This study investigates the impact of central bank digital currencies (CBDCs) on monetary policy flexibility, the effective lower bound (ELB), and negative interest rate policies (NIRPs), specifically in the case of the digital euro (DE). Through a combination of theoretical modeling and empirical analysis, including two extensive surveys among EU participants, we explore whether CBDCs can change the ELB and affect consumer preferences in favor of the digital euro over physical cash. Our findings indicate that… Show more
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