IDEAS home Printed from https://ideas.repec.org/p/cbt/econwp/18-10.html
   My bibliography  Save this paper

Is Cash Dead? Using Economic Concepts To Motivate Learning and Economic Thinking

Author

Abstract

Simple but neglected concepts such as the velocity of circulation are ideal to open up discussions in macroeconomics classes, in this case about why the demand for money may rise or fall and about the likelihood of a cashless society. First, we review the history of the velocity of circulation. Next, we provide details of a research exercise in an undergraduate macroeconomics course. This exercise includes students searching for data on financial and monetary systems and national accounts. Data sources and links are provided for different countries. We also explain how such an exercise can be used to further Excel skills of students. Finally, we discuss our experiences from this exercise, including student feedback about the exercise from a survey we conducted.

Suggested Citation

  • Philip Gunby & Stephen Hickson, 2018. "Is Cash Dead? Using Economic Concepts To Motivate Learning and Economic Thinking," Working Papers in Economics 18/10, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:18/10
    as

    Download full text from publisher

    File URL: https://repec.canterbury.ac.nz/cbt/econwp/1810.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Bagnall & David Bounie & Kim P. Huynh & Anneke Kosse & Tobias Schmidt & Scott Schuh, 2016. "Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 1-61, December.
    2. Stephen F. Quinn & William Roberds, 2008. "The evolution of the check as a means of payment: a historical survey," Economic Review, Federal Reserve Bank of Atlanta, vol. 93(4).
    3. Anderson, Richard G. & Bordo, Michael & Duca, John V., 2017. "Money and velocity during financial crises: From the great depression to the great recession," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 32-49.
    4. Helmut Stix, 2004. "How Do Debit Cards Affect Cash Demand? Survey Data Evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 31(2), pages 93-115, June.
    5. Tamas Briglevics & Scott Schuh, 2013. "U.S. consumer demand for cash in the era of low interest rates and electronic payments," Working Papers 13-23, Federal Reserve Bank of Boston.
    6. Tom Cusbert & Thomas Rohling, 2013. "Currency Demand during the Global Financial Crisis: Evidence from Australia," RBA Research Discussion Papers rdp2013-01, Reserve Bank of Australia.
    7. Peter N. Ireland, 1991. "Financial evolution and the long-run behavior of velocity : new evidence from U.S. regional data," Economic Review, Federal Reserve Bank of Richmond, vol. 77(Nov), pages 16-26.
    8. Christopher Martin & Costas Milas, 2012. "Quantitative easing: a sceptical survey," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(4), pages 750-764, WINTER.
    9. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    10. David E.W. Laidler, 2016. "The Golden Age of the Quantity Theory," Economics Books, Princeton University Press, edition 1, number 4959.
    11. Reistad, Dale L., 1967. "The coming cashless society," Business Horizons, Elsevier, vol. 10(3), pages 23-32.
    12. Blejer, Mario I, 1979. "The Demand for Money and the Variability of the Rate of Inflation: Some Empirical Results," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 545-549, June.
    13. Amy Henderson, 2016. "Growing by getting their hands dirty: Meaningful research transforms students," The Journal of Economic Education, Taylor & Francis Journals, vol. 47(3), pages 241-257, July.
    14. Morten Linnemann Bech & Umar Faruqui & Frederik Ougaard & Cristina Picillo, 2018. "Payments are a-changin' but cash still rules," BIS Quarterly Review, Bank for International Settlements, March.
    15. Michael D. Bordo & Athanasios Orphanides, 2013. "The Great Inflation: The Rebirth of Modern Central Banking," NBER Books, National Bureau of Economic Research, Inc, number bord08-1, July.
    16. Mark Blaug & Walter Eltis & Dennis O’Brien & Don Patinkin & Robert Skidelsky & Geoffrey Wood, 1995. "The Quantity Theory of Money," Books, Edward Elgar Publishing, number 73.
    17. John Crow, 2013. "Panel Session I, Practical Experiences in Reducing Inflation, The Case of Canada," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 37-55, National Bureau of Economic Research, Inc.
    18. Smirlock, Michael, 1982. "Inflation Uncertainty and the Demand for Money," Economic Inquiry, Western Economic Association International, vol. 20(3), pages 355-364, July.
    19. Chris Bloor & Chris Hunt & Tim Ng & Hamish Pepper, 2008. "The use of money and credit measures in contemporary monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 71, March.
    20. Silvio Contessi & Hoda S. El-Ghazaly, 2011. "Banking crises around the world: different governments, different responses," The Regional Economist, Federal Reserve Bank of St. Louis, issue Apr, pages 10-16.
    21. Frownfelter- Lohrke, Cynthia, 2017. "Teaching good Excel design and skills: A three spreadsheet assignment project," Journal of Accounting Education, Elsevier, vol. 39(C), pages 68-83.
    22. W A Razzak, 2001. "Money in the era of inflation targeting," Reserve Bank of New Zealand Discussion Paper Series DP2001/02, Reserve Bank of New Zealand.
    23. James Staveley-O'Carroll, 2018. "Integrating graphing assignments into a money and banking course using FRED," The Journal of Economic Education, Taylor & Francis Journals, vol. 49(1), pages 72-90, January.
    24. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    25. Alan Boaden, 2008. "Recent trends and developments in currency," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 71, March.
    26. Siklos, Pierre L. & Eckhold, Kelly R., 1997. "Income Velocity in Turbulent Times: The Role of Institutional Factors in the New Zealand Experience," Journal of Macroeconomics, Elsevier, vol. 19(1), pages 31-52, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philip Gunby & Stephen Hickson, 2020. "Cashless Economies, Data Analysis, and Research-Based Teaching: The Versatility of the Velocity of Money for Teaching Macroeconomics," Working Papers in Economics 20/07, University of Canterbury, Department of Economics and Finance.
    2. Michele Manna, 2022. "The bonfire of banknotes," Temi di discussione (Economic working papers) 25, Bank of Italy, Economic Research and International Relations Area.
    3. Antón, Arturo & Hernández-Trillo, Fausto & Ventosa-Santaulària, Daniel, 2021. "(In)Effective tax enforcement and demand for cash," Journal of Macroeconomics, Elsevier, vol. 70(C).
    4. Scott Schuh, 2018. "Measuring Consumer Expenditures With Payment Diaries," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 13-49, January.
    5. Guerino Ardizzi & Andrea Nobili & Giorgia Rocco, 2020. "A game changer in payment habits: evidence from daily data during a pandemic," Questioni di Economia e Finanza (Occasional Papers) 591, Bank of Italy, Economic Research and International Relations Area.
    6. Rua, António, 2018. "Modelling currency demand in a small open economy within a monetary union," Economic Modelling, Elsevier, vol. 74(C), pages 88-96.
    7. Camila Figueroa & Michael Pedersen, 2017. "Forecasting Demand for Denominations of Chilean Coins and Banknotes," Working Papers Central Bank of Chile 799, Central Bank of Chile.
    8. Rainone, Edoardo, 2023. "Tax evasion policies and the demand for cash," Journal of Macroeconomics, Elsevier, vol. 76(C).
    9. Tobias Trütsch, 2020. "The impact of contactless payment on cash usage at an early stage of diffusion," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-35, December.
    10. Scott Schuh, 2017. "Measuring consumer expenditures with payment diaries," Working Papers 17-2, Federal Reserve Bank of Boston.
    11. Jobst, Clemens & Stix, Helmut, 2017. "Doomed to Disappear? The Surprising Return of Cash Across Time and Across Countries," CEPR Discussion Papers 12327, C.E.P.R. Discussion Papers.
    12. Fujiki, Hiroshi & Tanaka, Migiwa, 2018. "How do we choose to pay using evolving retail payment technologies? Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 49(C), pages 85-99.
    13. Camila Figueroa S. & Michael Pedersen, 2019. "A system for forecasting Chilean cash demand – the role of forecast combinations," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 22(2), pages 040-068, August.
    14. Serhan Cevik, 2020. "Dirty money: Does the risk of infectious disease lower demand for cash?," International Finance, Wiley Blackwell, vol. 23(3), pages 460-471, December.
    15. Schneider, Friedrich, 2017. "Restricting or Abolishing Cash: An Effective Instrument for Fighting the Shadow Economy, Crime and Terrorism?," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 162914, Deutsche Bundesbank.
    16. Luca Baldo & Elisa Bonifacio & Marco Brandi & Michelina Lo Russo & Gianluca Maddaloni & Andrea Nobili & Giorgia Rocco & Gabriele Sene & Massimo Valentini, 2021. "Inside the black box: tools for understanding cash circulation," Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) 7, Bank of Italy, Directorate General for Markets and Payment System.
    17. Humphrey, David B., 2010. "Retail payments: New contributions, empirical results, and unanswered questions," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1729-1737, August.
    18. repec:zbw:rwidps:0030 is not listed on IDEAS
    19. Torgler, Benno & Schneider, Friedrich & Schaltegger, Christoph A., 2007. "With or Against the People? The Impact of a Bottom-Up Approach on Tax Morale and the Shadow Economy," Berkeley Olin Program in Law & Economics, Working Paper Series qt6331x6vz, Berkeley Olin Program in Law & Economics.
    20. Ziesemer, Thomas H.W., 2010. "The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration," Economic Modelling, Elsevier, vol. 27(5), pages 1230-1245, September.
    21. Milo Bianchi, 2012. "Financial Development, Entrepreneurship, and Job Satisfaction," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 273-286, February.

    More about this item

    Keywords

    Teaching Macroeconomics; Velocity of Circulation; Cashless Society; Undergraduate Research.;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbt:econwp:18/10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Albert Yee (email available below). General contact details of provider: https://edirc.repec.org/data/decannz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.