infonet-economy

This pioneer paper studies whether and how Bitcoin shocks are transmitted to the U.S economy. We employ a new methodology: TVP FAVAR model with stochastic volatility. We use a large dataset of 111 major U.S variables from 1959:m1 to 2016:m12. The results show that Bitcoin shocks significantly impact the U.S. econ-omy. This significant impact is pronounced in a volatile and increasing U.S economy. The Bitcoin has a posi-tive relationship on the U.S real activity, and a negative one on U.S prices and interest rates. Effects on the Monetary Policy exist via the interest rates and the Money, Credit and Finance transmission channels.