This paper explores the merits of introducing a retail central bank digital currency (CBDC) in Australia, focusing on the extent to which consumers would value having access to a digital form of money that is even safer and potentially more private than commercial bank deposits.

Most economic research seeks to reveal truths about economic relationships. This paper is different because it reflects on how those truths are revealed, focusing on a research strategy that is common in the data analysis stage. The paper introduces alternative strategies and shows that they can produce very different conclusions.

Abstract: It turns out that price index functions share a basic interpretation; practically all of them measure a change in some average of quality-adjusted prices. The different options are distinguished by their choice of average, their definition of quality, and their stance on what I label ‘equal interest’. This new perspective updates the so-called stochastic...