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Avoiding a meltdown: managing the value of small change


  • François R. Velde


To prevent a shortage of small change, the U.S. Department of the Treasury recently prohibited the melting and exportation of pennies and other coins. The problem arises because pennies and nickels are made of inappropriately expensive material, and there is or soon will be a profit to be made from transferring their content to alternative uses. The author provides a historical context for the problem of small change and discusses possible remedies

Suggested Citation

  • François R. Velde, 2008. "Avoiding a meltdown: managing the value of small change," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 17-28.
  • Handle: RePEc:fip:fedhep:y:2008:i:qi:p:17-28:n:v.32no.1

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    References listed on IDEAS

    1. Sargent, Thomas J & Velde, Francois R, 1999. "The Big Problem of Small Change," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 137-161, May.
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