Economics, Econometrics and Finance
4 years ago

Declining cash transactions could lead to accelerating inflation, study finds.

RePEc: Research Papers in Economics
The evolution of cash transactions: some implications for monetary policy
Stacey L. Schreft, Bruce D. Smith

Paper Summary

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The article discusses how changes in the demand for cash can affect monetary policy. Different policy approaches can lead to either increasing or decreasing inflation rates depending on the circumstances. Maintaining a fixed composition of government liabilities can be advantageous under certain conditions, while interest rate or inflation targeting may be more reliable in uncertain situations.