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Kenneth Rogoff, the professor of Economics at Harvard, writing in Financial Times, poses the question “Is it time to consider the phasing out of paper money?” Kenneth Rogoff is the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard. Any opinion expressed by Rogoff has to be taken extremely seriously as from 2001-2003, he served as Chief Economist and Director of Research at the International Monetary Fund. Rogoff’s treatise Foundations of International Macroeconomics (joint with Maurice Obstfeld) is the standard graduate text in the field worldwide, and his monthly syndicated column on global economic issues is published regularly in over 50 countries.
Writing in Financial Times, in an article titled: Paper Money is unfit for a world of high crime and low inflation, Rogoff argues that abolishing physical currency would achieve currency’s two important objectives. First, it would eliminate Zero Bound on policy interest rates that has acted to handcuff central banks since the financial crisis. At the moment, if central Banks set interest rates too low, in an attempt to stimulate growth, people simply move their money into cash. Secondly. phasing out large denomination notes would make it difficult for criminals to conduct their business; it is believed that a high proportion of large denomination notes are in the hands of criminals. Large denomination notes facilitate tax evasion and illegal activity.
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Kenneth Rogoff, the professor of Economics at Harvard, writing in Financial Times, poses the question “Is it time to consider the phasing out of paper money?” Kenneth Rogoff is the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard. Any opinion expressed by Rogoff has to be taken extremely seriously as from 2001-2003, he served as Chief Economist and Director of Research at the International Monetary Fund. Rogoff’s treatise Foundations of International Macroeconomics (joint with Maurice Obstfeld) is the standard graduate text in the field worldwide, and his monthly syndicated column on global economic issues is published regularly in over 50 countries.
Writing in Financial Times, in an article titled: Paper Money is unfit for a world of high crime and low inflation, Rogoff argues that abolishing physical currency would achieve currency’s two important objectives. First, it would eliminate Zero Bound on policy interest rates that has acted to handcuff central banks since the financial crisis. At the moment, if central Banks set interest rates too low, in an attempt to stimulate growth, people simply move their money into cash. Secondly. phasing out large denomination notes would make it difficult for criminals to conduct their business; it is believed that a high proportion of large denomination notes are in the hands of criminals. Large denomination notes facilitate tax evasion and illegal activity.
Read more
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