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Coronavirus panic fuels a surge in cash demand

Goodhart, C. A. E. and Ashworth, Jonathan (2020) Coronavirus panic fuels a surge in cash demand. Discussion papers (DP14910). Centre for Economic Policy Research (CEPR), London, UK.

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Abstract

Over the past decade the media have regularly reported on the imminent death of cash amid rapid innovation in payment technologies. However, cash in circulation has actually been growing strongly in many counties. Perhaps unsurprisingly given Coronavirus-related health concerns, there have been renewed calls to abandon cash and some observers have argued the virus will accelerate its demise. Data thus far suggest, however, that currency in circulation has actually surged in a number of countries. While the economic shutdowns and increased use of online retailing are currently diminishing cash's traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes.

Item Type: Monograph (Discussion Paper)
Official URL: https://cepr.org/content/discussion-papers
Additional Information: © 2020 The Authors
Divisions: Financial Markets Group
Subjects: H Social Sciences > HG Finance
R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money
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
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N10 - General, International, or Comparative
Date Deposited: 06 Jul 2020 14:27
Last Modified: 11 Jul 2020 23:07
URI: http://eprints.lse.ac.uk/id/eprint/105311

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