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.
About the Author
Kenneth S Rogoff teaches in the Economics Department of Harvard University where he is Thomas D Cabot Professor of Public Policy.During 2001-2003 Rogoff was chief economist at the Internatonal Monetary Fund. His newest book The Curse of Cash, shows why phasing out most (except for small bills) would likely significantly reduce crime and tax evasion, while also helping central banks fight financial crises. His 2009 book, with Professor Carmen M Reinhart of the University of Maryland, was a NY Times and Amazon best seller; it exploits an extensive new database, developed by the authors over many years, and now widely used by researchers, policymakers and investor. Reinhart and Rogoff show the remarkable quantitative similarities in deep financial crises across time and regions. Rogoff's 1996 treatise with Maurice Obstfeld on the Foundations of International Macroeconomics remains the standard graduate reference in the field. His monthly column on global economic issues is published in over fifty countries and a dozen languages. He is also a frequent commentator in the media, including NPR, BBC, The Financial Times, the Wall Street Journal, CNN, CNBC and Bloomberg.
Outside economics, Rogoff was awarded the life title of international grandmaster of chess by the World Chess Federation in 1978. He is married to Natasha Lance Rogoff, and has two children, Gabriel and Juliana.