Several central banks are studying and experimenting with Central Bank Digital Currencies (CBDCs), with the aim to increase the effectiveness of monetary policy and to limit the spread of private cryptocurrencies. However, it is thus far unclear what the distributive impact of this innovative tool might be.

A CBDC implies the theoretical possibility for all households and/or firms in an economy to hold a new kind of assets, which is a direct liability of the central bank (thus akin to bank reserves), either directly (“retail CBDC”) or through financial intermediaries (“wholesale CBDC”).

Using a stock-flow consistent model (SFC) calibrated to represent a generic advanced economy in secular stagnation, in this work I consider if and how this new tool of monetary policy could help the central bank reaching the goal of regulating the distribution of income as recommended by the Pasinetti index. Specifically, while Post-Keynesians model – such as ours – typically consider the supply of traditional money as endogenous, the supply of CBDC, being a direct liability of the central bank, can be exogenously fixed by the central bank. Therefore, a new sort of sterilization becomes possible for the central bank, making the interest policy partly independent of the money supply policy (in the sense that there are now two kinds of money, the supply of one of which can be changed in the opposite direction of the other). Even though total supply of base money remains defined by the total value of the central bank’s balance sheet, the possibility for the central bank to decide on which market(s) to operate allows a new degree of flexibility of which I analyse and discuss the impact in terms of income distribution.