Kenneth Rogoff

Cursed Cash and Central Banking

Kenneth Rogoff, Harvard University professor, speaks during an interview in Hong Kong, China, on Tuesday, July 6, 2010. China's property market is beginning a "collapse" that will hit the nation's banking system, Rogoff said. Photographer: Jerome Favre/Bloomberg *** Local Caption *** Kenneth Rogoff
Kenneth Rogoff, Harvard University professor, doesn't want cash to be used beyond the occasional Starbucks coffee.
  • Why it matters

    Why it matters

    The economist says removing cash from circulation would allow central banks to force consumers to spend more money, reviving struggling economies in the process.

  • Facts


    • The European Central Bank has lowered its interest rate on bank reserves into negative territory in a bid to force banks to lend out the money.
    • The prevalence of cash means households can simply hoard their money rather than suffer from negative interest rates.
    • Germany still relies on cash more than any other industrial nation. Only about one in five transactions are done by credit card.
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Kenneth Rogoff has been making a simple argument now for the better part of two decades now: It’s time to stop using cash.

To be more exact, he wants banks to keep your money for you. Hiding dollar or euro bills under your mattress should no longer be an option. Nor should large bills be used by criminals or for large under-the-table purchases that avoid taxes.

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