Cash in Circulation and the Circulation of Cash

Cash in Circulation and the Circulation of Cash

As a supplement to his video "The Changing Role of Cash in the Economy", Sir Mark Boleat explains why cash in circulation has been increasing, despite the declining use of it.
Overview

It is very clear that there has been, and continues to be, a sharp reduction in the use of cash to make payments. This is true not only in Britain, but in many other countries as well. However, the amount of cash in circulation, far from reducing, has actually been rising. The key point is that cash payments represent a flow, whereas cash in circulation represents a stock.

Key learning objectives:

  • How has cash payments and cash in circulation changed over the last decade?

  • Why has cash in circulation not fallen in line with the reduction in cash to finance transactions?

  • What can explain the rise in cash holdings?

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Sir Mark Boleat

Sir Mark Boleat

Sir Mark Boleat has held a wide range of board level appointments in the UK and Jersey. He is currently the Chairman of LINK, Eldon Insurance Services and the Governors of the City of London Academy Highbury Grove. Sir Mark is also Vice Chairman of the Advisory Board of the International Business and Diplomatic Exchange.

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