Vilfredo Pareto Research Seminar
Arnaud Mehl

Central bank digital currency in an open economy

Arnaud Mehl, Adviser at the European Central Bank
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Webinar streamed via Zoom

The Vilfredo Pareto Research Seminar is the Economics department's weekly seminar, featuring external speakers in all areas of economics.

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As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Graduate Institute is pleased to invite you to a public talk given by Arnaud Mehl, Adviser in the International Policy Analysis Division of the European Central Bank (ECB).

He will present his paper Central bank digital currency in an open economy, coauthored with Massimo Ferrari and Livio Stracca.

Abstract: We examine the open-economy implications of the introduction of a central bank digital currency (CBDC). We add a CBDC to the menu of monetary assets available in a standard two-country DSGE model and consider a broad set of alternative technical features in CBDC design. We analyse the international transmission of standard monetary policy and technology shocks in the presence and absence of a CDBC and the implications for optimal monetary policy and welfare. The presence of a CBDC amplifies the international spillovers of shocks to a significant extent, thereby increasing international linkages. But the magnitude of these effects depends crucially on CBDC design and can be significantly dampened if the CBDC possesses specific technical features. We also show that domestic issuance of a CBDC increases asymmetries in the international monetary system by reducing monetary policy autonomy in foreign economies.


Arnaud Mehl is a Research fellow at the Centre for Economic Policy Research. He has worked at the ECB since 2001 in various areas and, prior to the ECB, for the French Treasury and Edmond de Rothschild Asset Management. Arnaud is a member of the editorial board of the ECB working paper series, an associate editor of the Journal of International Money and Finance and a research associate at the globalization institute of the Dallas Fed. His main fields of research are open-economy macroeconomics, international finance and economic history.