The Macroeconomics of De-Cashing

Author/Editor:

Alexei P Kireyev

Publication Date:

March 27, 2017

Electronic Access:

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Summary:

The paper presents a simple framework for the analysis of the macroeconomic implications of de-cashing. Defined as replacing paper currency with convertible deposits, de-cashing would affect all key macroeconomic sectors. The overall macreconomic impact of de-cashing would depend on the balance of growth-enhancing and growth-constraining factors. Starting from a traditional saving-investment balance, the paper develops a four-sector macroeconomic framework. It is purely illustrative and is designed to provide a roadmap for a systematic evaluation of de-cashing. The framework is disaggregated into the real, fiscal, monetary, and external sectors and potential implications of de-cashing are then identified in each sector. Finally, the paper draws a balance on possible positive and negative macroeconomic implications of de-cashing, and proposes policies capable of augmenting its economic and social benefits, while reducing potential costs.

Series:

Working Paper No. 17/71

English

Publication Date:

March 27, 2017

ISBN/ISSN:

9781475589252/1018-5941

Stock No:

WPIEA2017071

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

26

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