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The Macroeconomics of De-Cashing

Author

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  • Mr. Alexei P Kireyev

Abstract

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.

Suggested Citation

  • Mr. Alexei P Kireyev, 2017. "The Macroeconomics of De-Cashing," IMF Working Papers 2017/071, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/071
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=44768
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    Citations

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    Cited by:

    1. Fritz Breuss, 2017. "The United States-Euro Area Growth Gap Puzzle," WIFO Working Papers 541, WIFO.
    2. Gros, Daniel, 2017. "Implications of the Expanding Use of Cash for Monetary Policy," CEPS Papers 12661, Centre for European Policy Studies.

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