|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|97350||2017||10 صفحه PDF||سفارش دهید||6469 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : The Quarterly Review of Economics and Finance, Volume 65, August 2017, Pages 378-387
This paper captures the trade-offs between alternative payment instruments where each is associated with costs and benefits. Most models of cashâcredit choice assume cash is a safe non-interest-bearing asset and credit is interest-bearing but costly. Here, I consider the risk of loss from using cash resulting from theft and foregone interest earnings. I use a cash-in-advance model to analyze the channel through which monetary policy could have a positive impact on the economy by altering the incentives for cashâcredit choice. The model indicates that although expansionary monetary policy increases total consumption, the resulting substitution toward credit might increase transactions cost, which may not result in improving welfare. The net effect depends on the change in transactions cost of using credit relative to the responsiveness of theft to inflation. The assumption of fixed cost of credit is crucial to these results. Calibration of the model to the US and Polish economy confirms the results.