040164 SE Seminar on liquidity, money, blockchain, and cryptocurrency (MA) (2019S)
- Registration is open from Mo 11.02.2019 09:00 to We 20.02.2019 12:00
- Registration is open from Tu 26.02.2019 09:00 to We 27.02.2019 12:00
- Deregistration possible until Th 14.03.2019 23:59
Classes (iCal) - next class is marked with N
Aims, contents and method of the course
Assessment and permitted materials
Minimum requirements and assessment criteria
The grade is calculated as a weighted average of the presentation grade (90 %) and
participation grade (10%), including contribution to class discussions. There will be no midterm exam. The minimum requirement for a positive grade is an at least 50% performance.
There are two presentations to the class;
1) You will need to research 2-3 cryptocurrencies and present the following
a. Describe the function of a number of cryptocurrencies and explain what
market/industry they will potentially disrupt.
b. Is blockchain or cryto necessary or not in your opinion
2) Present one of the academic papers (marked with * in the reading list) to the class
and lead the discussions.
Session 1: Money
In this session, we will follow closely Lagos, Rocheteau, & Wright (2017) and discuss the
following topics: 1) the role of money as a store of value, medium of exchange and unit of
account, 2) the role of intermediation, 3) liquidity and asset.
Lagos, R., Rocheteau, G., & Wright, R. (2017). Liquidity: A new monetarist
perspective. Journal of Economic Literature, 55(2), 371-
KIYOTAKI, N., AND R. WRIGHT (1989): “On Money as a Medium of Exchange,” Journal of
Political Economy, 97 (4), 927–954. [1537,1541]
Recommended (* for the term report)
SAMUELSON, P. A. (1958): “An Exact Consumption-Loan Model of Interest With or Without
the Social Con- trivance of Money,” Journal of Political Economy, 66 (6), 467–482. 
*MATTHIAS DOEPKE and MARTIN SCHNEIDER (2017): “MONEY AS A UNIT OF ACCOUNT,
“Econometrica, Vol. 85, No. 5 (September, 2017), 1537–1574 MATTHIAS DOEPKE
FREEMAN, S., AND G. TABELLINI (1998): “The Optimality of Nominal Contracts,” Economic
Theory, 11, 545– 562. 
LAGOS, R., AND R. WRIGHT (2005): “A Unified Framework for Monetary Theory and Policy
Analysis,” Journal of Political Economy, 113 (3), 463–484. 
Kocherlakota, Narayana (1998), Money is Memory, Journal of Economic Theory 81, 232-
*Ariel Rubinstein and Asher Wolinsky (1987) “Middlemen,” Quarterly Journal of Economics
*Yang, Ming and Yao Zeng, (2018): The Coordination of Intermediation∗
KIYOTAKI, N., AND J. MOORE (1997): “Credit Chains,” Unpublished Manuscript, Princeton
Liquidity and Asset
Nobuhiro Kiyotaki and John H. Moore (1997) “Credit Cycles,” Journal of Political
Economy 105, 211-48.
Ozdenoren, Emre, Kathy Yuan and Shengxing Zhang (2019)“ On Money as a collateral
Ozdenoren, Emre, Kathy Yuan and Shengxing Zhang (2019) “Dynamic Asset-Backed
Session 2: Bitcoin and BLT technology
In this session, we will follow the textbook Bitcoin and Cryptocurrency Technologies: A
Comprehensive Introduction by Narayanan, Bonneau, Felten, Miller and Goldfeder (referred
to as NBFMG below) to cover the following basics.
Intro to cryptography & crypto currencies
Overview of consensus protocols
Bitcoin nuts and bolts
Proof of Work and mining strategies; Proof of Stake
Ethereum: Decentralized Apps, EVM, and the Ethereum blockchain
Anonymity and Privacy
*Griffin, John and Amin Shams Is Bitcoin Really Un-Tethered?
*Wei, Wang Chun, 2018, The Impact of Tether Grants on Bitcoin, Working Paper.
*Yukun Liu and Aleh Tsyvinski, Risks and Returns of Cryptocurrency
Saleh, Fahad, 2017, Blockchain without waste: Proof-of-stake, Discussion paper, working
Nakamoto, Satoshi, 2008, Bitcoin: A peer-to-peer electronic cash system, Online Publication.
Biais, Bruno, Christophe Bisiere, Matthieu Bouvard, and Catherine Casamatta, 2017, The
blockchain fold theorem, Preliminary Work in Progress.
Athey, Susan, Ivo Parashkevov, Vishnu Sarukkai, and Jing Xia, 2016, Bitcoin pricing,
adoption, and usage: Theory and evidence, Working Paper.
Budish, Eric (2018), The Economic Limits of Bitcoin and the Blockchain, mimeo
University of Chicago.
Cong, Lin William, Zhiguo He and Jiasun Li (2018), Decentralized Mining in Centralized
Pools, mimeo University of Chicago Booth School of Business.
Session 3: Tokenomics and Private Coins
In this session, we will review the most recent academic research on private coins.
Li, Jiasun, and William Mann, 2018, Initial coin offering and platform building, Working Paper.
Michael Sockin and Wei Xiong, 2018 A Model of Cryptocurrencies
Lin William Cong, Ye Li and Neng Wang, 2018 Tokenomics: Dynamic Adoption and Valuation
Recommended Reading (all with *)
Gans, Joshua S, and Hanna Halaburda, 2015, Some economics of private digital currency, in Economic
Analysis of the Digital Economy . pp. 257–276 (University of Chicago Press).