Kenneth S. Rogoff's The Curse of Cash

3 Pages Posted: 23 May 2017

See all articles by William J. Luther

William J. Luther

Florida Atlantic University; American Institute for Economic Research

Date Written: May 23, 2017


In his recent book, The Curse of Cash, Ken Rogoff makes the case for getting rid of hand-to-hand currency. The argument is relatively straightforward. Cash, according to Rogoff, is largely used to buy and sell illegal goods and services and evade taxes. It also places a lower bound on interest rates, thereby limiting the extent to which the monetary authority can prevent recessions. As such, he argues, we’d be better off without it. Rogoff’s work is subtle and sophisticated. He anticipates many counterarguments and heads them off to the extent possible. Nonetheless, I find three major shortcomings in the work: the evidence on the extent to which cash is employed by criminals and tax cheats is flimsy, the net benefits of eliminating crime and tax evasion are overstated, and it is not clear that cash prevents the central bank from conducting effective monetary policy.

Keywords: cash, money, ban, curse of cash, crime, tax evasion, zero lower bound

JEL Classification: E41, E42, E50, E52, E58

Suggested Citation

Luther, William J., Kenneth S. Rogoff's The Curse of Cash (May 23, 2017). Available at SSRN: or

William J. Luther (Contact Author)

Florida Atlantic University ( email )

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Boca Raton, FL 33431
United States


American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States


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