["Bulletin of Economic Research, EarlyView. ", "\nABSTRACT\nEmploying a balance sheet perspective, we examine how the transmission of macroeconomic shocks varies between economies with and without a central bank digital currency (CBDC). We develop a dynamic stochastic general equilibrium model that integrates the balance sheets of core economic sectors. The introduction of a CBDC displaces deposit holdings, thereby expanding the central bank's balance sheet. Commercial banks reallocate assets toward government bonds and reduce lending to enterprises, resulting in tighter credit conditions and heightened investment volatility. Numerical simulations suggest that CBDC issuance amplifies economic fluctuations across all exogenous shocks. Although price‐based policy frameworks operate primarily through commercial bank balance sheets, quantity‐based frameworks function through household balance sheets. The welfare effects of CBDC issuance are contingent upon the specific type of shock and the prevailing policy regime.\n"]