SCOTT SUMNER WRITES:
In a new book called “The Curse of Cash”, Harvard economist Kenneth Rogoff advocates removing from circulation all cash with a denomination of greater than $10. In countries such as Sweden, Canada and Italy, the government is already beginning to discourage the use of cash. Almost everywhere in the world, a decreasing share of transactions are being done with cash. Are we moving towards a cashless society?
Surprisingly, despite the increasing use of credit cards, cash holdings are about 8% of GDP, which is actually a larger share of the US economy than a decade ago, indeed even larger than 90 years ago.
The amount of cash in circulation (paper currency and coins) is roughly $4500 for every man, women and child in America. It is believed that roughly ½ that total is held overseas, but even $2000/person would be a surprisingly large figure…
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