Zero-Knowledge Optimal Monetary Policy under Stochastic Dominance

October 12, 2022 · Entered Twilight · 🏛 IACR Cryptology ePrint Archive

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Authors David Cerezo Sánchez arXiv ID 2210.06139 Category cs.CR: Cryptography & Security Cross-listed cs.CE, econ.GN Citations 0 Venue IACR Cryptology ePrint Archive Repository https://github.com/Calctopia-OpenSource/cothority/tree/zkmonpolicy ⭐ 2 Last Checked 1 month ago

Abstract

Optimal simple rules for the monetary policy of the first stochastically dominant crypto-currency are derived in a Dynamic Stochastic General Equilibrium (DSGE) model, in order to provide optimal responses to changes in inflation, output, and other sources of uncertainty. The optimal monetary policy stochastically dominates all the previous crypto-currencies, thus the efficient portfolio is to go long on the stochastically dominant crypto-currency: a strategy-proof arbitrage featuring a higher Omega ratio with higher expected returns, inducing an investment-efficient Nash equilibrium over the crypto-market. Zero-knowledge proofs of the monetary policy are committed on the blockchain: an implementation is provided.