Abstract
We explore monetary policy in a world without currency. In our world, money is a form of government debt that bears interest, which can be negative as well as positive. Services of money are a factor of production. We show that the national accounts must be revised in this world. Using our baseline economy, we determine the balanced growth paths for a set of money interest rate target policy regimes. We find that Friedman monetary satiation without deflation is possible. We also examine a set of inflation rate targeting regimes. Evaluating a policy regime is an advanced exercise in public finance. Monetary satiation is not optimal even though money is cost less to produce.
