Coronavirus Panic Fuels a Surge in Cash Demand

9 Pages Posted: 29 Jun 2020

See all articles by Jonathan Ashworth

Jonathan Ashworth

Independent

Charles Goodhart

London School of Economics & Political Science (LSE) - Financial Markets Group

Date Written: June 2020

Abstract

Over the past decade the media have regularly reported on the imminent death of cash amid rapid innovation in payment technologies. However, cash in circulation has actually been growing strongly in many counties. Perhaps unsurprisingly given Coronavirus-related health concerns, there have been renewed calls to abandon cash and some observers have argued the virus will accelerate its demise. Data thus far suggest, however, that currency in circulation has actually surged in a number of countries. While the economic shutdowns and increased use of online retailing are currently diminishing cash's traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes.

Keywords: Coronavirus, Currency usage, Hoarding in panics, Payment technologies

JEL Classification: E40, E41, E49, E63, N10

Suggested Citation

Ashworth, Jonathan and Goodhart, Charles A.E., Coronavirus Panic Fuels a Surge in Cash Demand (June 2020). CEPR Discussion Paper No. DP14910, Available at SSRN: https://ssrn.com/abstract=3638014

Charles A.E. Goodhart

London School of Economics & Political Science (LSE) - Financial Markets Group ( email )

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