We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: February 26th (Tuesday), 17:00 ~ 18:20
2. Where: Building 9, 6th #9601
3. Speaker: Prof. Kang, Kee Youn (Yonsei University)
4. Topic: Money, Cryptocurrency, and Monetary Policy
5. Research field: Managerial Economics

(Abstract)
We develop a search theoretic model where both money and Bitcoin can be used as a medium of exchanges, and currency choices are endogenously determined. Quantitative analysis shows that Bitcoin can meaningfully compete with money only when the inflation rate is sufficiently high, and that welfare in an economy with both money and Bitcoin is lower than that in a money-only economy due to the inefficient mining process of Bitcoins. The welfare gap between the two economies expands as the inflation rate increases. An increase in transaction fees for Bitcoins can increase welfare by reducing inefficient Bitcoin transactions.