Template-type: ReDIF-Paper 1.0
Author-Name: Dirk Niepelt
Author-Name-First: Dirk
Author-Name-Last: Niepelt
Author-Person: pni29
Title: Payments and prices
Abstract: We analyze the effect of structural change in the payment sector and of monetary policy on prices. Means of payment are obtained through portfolio choices and commodity sales and "liquified" through velocity choices. Interest rates, intermediation margins, and costs of payment instrument use affect portfolios, velocities, liquidity, relative prices, and the aggregate price level. Money is neutral, interest rate policy is not. Scarcer liquidity need not drive up velocity. Payment instruments and velocities generate positive externalities. Commodity price aggregates mis-measure consumer price inflation, distinctly so over the business cycle.

Length: 32 pages
Creation-Date: 2023
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2023/working_paper_2023_03
File-Format: text/html
Number: 2023-03
Classification-JEL: E31, E41, E44, E52, G11, G23
Keywords: Payments, Velocity, Prices, Intermediation, Inflation
Handle: RePEc:snb:snbwpa:2023-03