HBCU Money™ Business Book Feature – The Curse Of Cash


51bsc1wx1l

From the New York Times bestselling author of This Time Is Different, “a fascinating and important book” (Ben Bernanke) about phasing out most paper money to fight crime and tax evasion–and to battle financial crises by tapping the power of negative interest rates

The world is drowning in cash–and it’s making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world’s leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money.

Even as people in advanced economies are using less paper money, there is more cash in circulation–a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.

As Rogoff shows, paper money can also cripple monetary policy. In the aftermath of the recent financial crisis, central banks have been unable to stimulate growth and inflation by cutting interest rates significantly below zero for fear that it would drive investors to abandon treasury bills and stockpile cash. This constraint has paralyzed monetary policy in virtually every advanced economy, and is likely to be a recurring problem in the future.

The Curse of Cash offers a plan for phasing out most paper money–while leaving small-denomination bills and coins in circulation indefinitely–and addresses the issues the transition will pose, ranging from fears about privacy and price stability to the need to provide subsidized debit cards for the poor.

While phasing out the bulk of paper money will hardly solve the world’s problems, it would be a significant step toward addressing a surprising number of very big ones. Provocative, engaging, and backed by compelling original arguments and evidence, The Curse of Cash is certain to spark widespread debate.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s