The Impact of Electronic Money on Monetary Policy: Based on DSGE Model Simulations

Starting with the interactive relationship between electronic money and household consumption stimuli, this paper deeply analyzes the changes in the behavior of each monetary subject under the impact of electronic money, and establishes a DSGE model based on the three economic sectors of family, com...

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Bibliographic Details
Published inMathematics (Basel) Vol. 9; no. 20; p. 2614
Main Authors Luo, Sumei, Zhou, Guangyou, Zhou, Jinpeng
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.10.2021
Subjects
Central banks
Commercial banks
Cost control
COVID-19
Digital currencies
DSGE model
Economic models
Economics
electronic money
Equilibrium
Food science
Households
Interest rates
Literature reviews
Loans
Macroeconomics
Mathematical models
Monetary policy
Parameter estimation
policy simulation
Prepayments
Simulation
Supply & demand
Variables
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Summary:Starting with the interactive relationship between electronic money and household consumption stimuli, this paper deeply analyzes the changes in the behavior of each monetary subject under the impact of electronic money, and establishes a DSGE model based on the three economic sectors of family, commercial bank and central bank under the New Keynesian framework. On this basis, the impact of electronic money on savings, loans, output and the interest rate, and its impact on monetary policy, are described by numerical simulation. The simulation results show that: (1) electronic money has asymmetric effects on savings and loans, but an irrational deviation on households; (2) the influence of electronic money on the interest rate has a reverse effect, and the “inverse adjustment” of the interest rate increases the management difficulty of the micro subject to a certain extent, and affects the effectiveness of monetary policy; (3) the regulatory effect of price monetary policy is better than that of quantitative monetary policy, and electronic money has the effect of its risk restraining impact. Finally, based on the analysis, this paper gives policy recommendations.
ISSN:2227-7390
2227-7390
DOI:10.3390/math9202614