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Digital Economy and the Global Financial System
2025-07-01
Time: 10:00 am - 11:30 am, July 1st, 2025
Speaker: Vincenzo Quadrini (University of Southern California)
Venue: 1F, Wanzhong Building, Langrun Garden, Peking University
Abstract:
The growth of the Digital Economy could have important implications for international financial markets, including the centrality of traditional reserve assets such as the US dollar. On the one hand, the creation of digital assets, especially Stablecoins, could increase the demand for traditional reserve assets. On the other, digital assets could serve as a substitute for traditional reserve assets, reducing their global demand. We find that, in the long-run, the increase in the demand for reserve assets dominates the substitution of traditional reserve assets. This would lead to lower US interest rates and larger US foreign borrowing. We also find that the expansion of the Digital Economy would result in higher idiosyncratic consumption volatility in the US but lower volatility in the rest of the world.
Speaker:
Professor Vincenzo Quadrini is the James McN. Stancill Chair in Business Administration and a Professor of Finance and Business Economics at the Marshall School of Business, University of Southern California. He serves as the Co-editor of the American Economic Journal: Macroeconomics, and is a Research Associate at the National Bureau of Economic Research (NBER) and a Research Fellow at the Centre for Economic Policy Research (CEPR). Professor Quadrini's research specializes in Macroeconomics, Financial Economics, and International Economics, and his work has been widely published in leading economics and finance journals. Prior to joining USC, he was a faculty member at Pompeu Fabra University, Duke University, and New York University.