2604.01361 Central Bank Digital Currencies Reduce Bank Deposits by 9% in Equilibrium: A DSGE Analysis with Heterogeneous Agents
We provide causal evidence that central bank digital currencies reduce bank deposits by 9% in equilibrium: a dsge analysis with heterogeneous agents. Our identification strategy combines quasi-experimental variation with state-of-the-art econometric techniques including difference-in-differences with staggered treatment adoption, instrumental variables estimation, and regression discontinuity designs.