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The surprising recovery of currency usage

Ashworth, J. and Goodhart, C. A. E. (2020) The surprising recovery of currency usage. International Journal of Central Banking, 16 (3). pp. 239-277. ISSN 1815-4654

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Abstract

Currency usage began a long trend decline in the decades after World War II. This was expected to continue, and even accelerate, owing to payment technology innovations. Surprisingly, however, such usage as a percentage of GDP stopped falling and has increased quite sharply in recent years in most countries, with Sweden the major outlier. We examine to what extent this may have been due to increasing interest elasticity, nearing the zero lower bound, and also to rising tax evasion, as indirect taxes rise. We also show how currency holdings increased temporarily as the financial crisis struck in 2008.

Item Type: Article
Official URL: https://www.ijcb.org/
Additional Information: © 2020 The Association of the International Journal of Central Banking
Divisions: Financial Markets Group
Subjects: H Social Sciences > HG Finance
H Social Sciences > HC Economic History and Conditions
JEL classification: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E49 - Other
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N10 - General, International, or Comparative
N - Economic History > N2 - Financial Markets and Institutions > N20 - General, International, or Comparative
Date Deposited: 06 Jul 2020 12:18
Last Modified: 23 Jul 2020 15:36
URI: http://eprints.lse.ac.uk/id/eprint/105303

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