nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒10‒22
two papers chosen by

  1. Financial Literacy of Middle and Older Generations: Comparison of Japan and the United States By Satoshi Shimizutani; Hiroyuki Yamada
  2. Assessing the Impact of Central Bank Digital Currency on Private Banks By Andolfatto, David

  1. By: Satoshi Shimizutani (Nakasone Yasuhiro Peace Institute); Hiroyuki Yamada (Faculty of Economics, Keio University)
    Abstract: Financial literacy holds growing interest for managing assets/savings during the longer retirement period currently experienced in rapidly aging countries. We examine and compare levels and determinants of financial literacy as well as its association to asset allocation among middle and older generations of Japan and the United States. We present some interesting findings. First, financial literacy is generally associated with educational attainment, cognitive skills, coursework in economics or finance, and income level. Second, financial literacy is associated with resultant asset allocation; individuals with higher literacy are more likely to invest in stocks or securities separate from their savings. These patterns are commonly observed in Japan and the United States.
    Keywords: financial literacy, Japan, U.S., JSTAR, HRS
    JEL: D14 G11 J26
    Date: 2018–09–20
  2. By: Andolfatto, David (Federal Reserve Bank of St. Louis)
    Abstract: In this paper, I investigate the impact of central bank digital currency (CBDC) on banks in a model where the banking sector that is not perfectly competitive. The theoretical framework combines the Diamond (1965) model of government debt with the Klein (1971) and Monti (1972) model of a monopoly bank. There are two main results. First, the introduction of interest-bearing CBDC increases financial inclusion and diminishes the demand for cash. Second, the introduction of interest-bearing CBDC need not disintermediate banks in any way and may, in fact, expand their depositor base if the added competition compels banks to raise their deposit rates.
    Keywords: Digital Currency; Central Banks; Monopoly; Markups
    JEL: E4 E5
    Date: 2018–10–05

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