A currency union is when several independent sovereign nations share a common currency. This has been a recurring phenomenon in monetary history. In this article I study the theoretical foundations of such unions, and discuss some important currency unions in history, most notably the case of...

A number of recent articles argue that the 'problem of Bachet' - the problem of finding the most efficient set of weights - can shed light on the problem of finding the optimal denominational structure of a series of coins and bank notes. This note argues that the two problems differ in nature,...

Monetary policy space remains constrained by the lower bound in many countries, limitingthe policy options available to address future deflationary shocks. The existence of cashprevents central banks from cutting interest rates much below zero. In this paper, we considerthe practical feasibility...

One of the most important results of theoretical research on currency systems is that spacing denominations apart by a factor of two is better than a factor of three as this lowers the average number of notes and coins exchanged in transactions. These theoretical studies also claim that an...

Recent works suggest that convenient prices that match monetary denominations exhibit above-average price rigidity and are set up by firms that have incentives to be paid in cash. The relationship between convenient prices and cash usage has however never been explicitly examined. This paper...

By adding denominations to their coin and banknote series central banks can increase the efficiency of cash payments. In practice, however, they opt for a denominational structure with a relatively low density. The literature holds that this is because of the production costs involved. To test...

The elimination of large-denomination banknotes is one of several options to relax the effective-lower-bound constraint on nominal interest rates. We explore timing issues associated with the calling-in of large notes from a central banker's perspective and employ an optimal stopping model to...

In this paper, we analyze theoretically the coexistence of two means of payment, such as cash and digital or electronic payments, introducing some distortions in the payments markets to understand the widespread use of cash, specially in emerging countries. Lagos and Wright (2005) theoretical...

The coronavirus pandemic is a global crisis like no other in modern times, and there is a growing apprehension about handling potentially contaminated cash. This paper is the first empirical attempt in the literature to investigate whether the risk of infectious diseases affects demand for...

The twenty-first century “patent litigation explosion” is not unprecedented. In fact, the nineteenth century saw an even bigger surge of patent cases. During that era, the most prolific patent enforcers brought hundreds or even thousands of suits, dwarfing the efforts of today's leading...