Towards a cashless economy: Economic and socio-political implications

• Type: Article in International Scientific Journal
• Date: 2020

Authors

Cohen, N (Author) Other; Rubinchik, A (Author) Other; Shami, L (Author) Other

Journal

Title: European Journal of Political Economy

Vol. 61

ISSN: 0176-2680

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 12 Citations

Scopus - 17 Citations

Other information

Authenticus ID: P-017-3SG

DOI: 10.1016/j.ejpoleco.2019.101820

Abstract (EN): We construct a simple general equilibrium model to demonstrate how eliminating cash can lead to a misallocation of resources in a naturally segmented economy with observed (official) and non-observed (informal) sectors. The source of inefficiency mirrors the standard arguments explaining why money is essential: a promise backed by a good produced in one sector can not be used in another and so absence of a reliable fiat money reduces the gains from trade. We also point to several additional unintended consequences of cash elimination.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 12