Fernández-Villaverde, Jesús; Schilling, Linda; Uhlig, … - 2024
This paper shows the existence of a central bank trilemma. When a central bank is involved in financial intermediation …, either directly through a central bank digital currency (CBDC) or indirectly through other policy instruments, it can only … price stability. In particular, a commitment to price stability can cause a run on the central bank. Implementation of the …