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The Curse of Cash

Author

Listed:
  • Kenneth S. Rogoff

    (Harvard University)

Abstract

The world is drowning in cash—and it’s making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world’s leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money. Even as people in advanced economies are using less paper money, there is more cash in circulation—a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy. As Rogoff shows, paper money can also cripple monetary policy. In the aftermath of the recent financial crisis, central banks have been unable to stimulate growth and inflation by cutting interest rates significantly below zero for fear that it would drive investors to abandon treasury bills and stockpile cash. This constraint has paralyzed monetary policy in virtually every advanced economy, and is likely to be a recurring problem in the future. The Curse of Cash offers a plan for phasing out most paper money—while leaving small-denomination bills and coins in circulation indefinitely—and addresses the issues the transition will pose, ranging from fears about privacy and price stability to the need to provide subsidized debit cards for the poor. While phasing out the bulk of paper money will hardly solve the world’s problems, it would be a significant step toward addressing a surprising number of very big ones. Provocative, engaging, and backed by compelling original arguments and evidence, The Curse of Cash is certain to spark widespread debate.

Suggested Citation

  • Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
  • Handle: RePEc:pup:pbooks:10798
    as

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Negative Nominal Interest Rates: A Primer
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2019-12-02 13:10:33

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Hans-Werner Sinn, 2017. "What Marx Means Today," Economic Affairs, Wiley Blackwell, vol. 37(2), pages 229-239, June.
    2. Gerhard Rösl & Franz Seitz & Karl-Heinz Tödter, 2017. "Besser ohne Bargeld? Gesamtwirtschaftliche Wohlfahrtsverluste der Bargeldabschaffung," ROME Working Papers 201706, ROME Network.
    3. Jonathan Chiu & Thorsten V. Koeppl, 2017. "The Economics Of Cryptocurrencies - Bitcoin And Beyond," Working Paper 1389, Economics Department, Queen's University.
    4. Alvarez, Fernando & Lippi, Francesco, 2017. "Cash burns: An inventory model with a cash-credit choice," Journal of Monetary Economics, Elsevier, vol. 90(C), pages 99-112.
    5. König, Jörg, 2016. "Bares bleibt Wahres: Bargeld als Garant für Freiheit und Eigentum," Argumente zur Marktwirtschaft und Politik 136, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    6. Jean-Pierre Danthine, 2017. "Taux négatifs: made for Switzerland," PSE Working Papers halshs-01571650, HAL.
    7. repec:ejw:journl:v:14:y:2017:i:2:p:164-173 is not listed on IDEAS
    8. repec:bis:bisqtr:1709f is not listed on IDEAS
    9. repec:nbb:ecrart:y:2017:m:june:i:i:p:79-92 is not listed on IDEAS
    10. Rösl, Gerhard & Seitz, Franz & Tödter, Karl-Heinz, 2017. "Doing away with cash? The welfare costs of abolishing cash," IMFS Working Paper Series 112, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    11. Koichiro Kamada, 2017. "The Transactions Demand for Paper and Digital Currencies," IMES Discussion Paper Series 17-E-06, Institute for Monetary and Economic Studies, Bank of Japan.
    12. repec:kap:asiaeu:v:15:y:2017:i:4:d:10.1007_s10308-017-0492-3 is not listed on IDEAS
    13. Walter Engert & Ben Fung, 2017. "Central Bank Digital Currency: Motivations and Implications," Discussion Papers 17-16, Bank of Canada.
    14. repec:eee:jpolmo:v:39:y:2017:i:4:p:673-679 is not listed on IDEAS
    15. World Bank, "undated". "World Bank East Asia and Pacific Economic Update, October 2016," World Bank Other Operational Studies 25088, The World Bank.
    16. Seitz, Franz & Krueger, Malte, 2017. "The Blessing of Cash," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 162911, Deutsche Bundesbank.
    17. repec:pal:buseco:v:52:y:2017:i:1:d:10.1057_s11369-017-0031-7 is not listed on IDEAS
    18. repec:eee:inecon:v:115:y:2018:i:c:p:80-98 is not listed on IDEAS
    19. Cassie Davies & Mary-Alice Doyle & Chay Fisher & Samual Nightingale, 2016. "The Future of Cash," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 43-52, December.
    20. SAITO, Makoto, 2017. "Central bank notes and black markets: the case of the Japanese economy during and immediately after World War II," Discussion Papers 2017-01, Graduate School of Economics, Hitotsubashi University.
    21. Hettig, Thomas & Müller, Gernot J., 2018. "Fiscal policy coordination in currency unions at the effective lower bound," Journal of International Economics, Elsevier, vol. 115(C), pages 80-98.
    22. Codruta Rusu & Helmut Stix, 2017. "Von Bar- und Kartenzahlern – Aktuelle Ergebnisse zur Zahlungsmittelnutzung in Österreich," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 54-85.

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