The case of the Somali shilling defies the historical view that sovereign powers (i.e., legal tender status, public receivability) are necessary to explain the acceptance of fiat money at a positive value. Following the Somali state’s collapse in 1991, irredeemable paper shillings have...

There are increasingly many digital alternatives to physical cash as basic means of payment, many of these offered by non-financial private sector actors. While such a trend towards a cashless society brings the convenience of digital payments to users and can encourage innovation in financial...

We present results from the 2021 Methods-of-Payment (MOP) Survey, including updated payment shares based on a three-day shopping diary. We highlight long-term trends observed across previous MOP surveys from 2009, 2013 and 2017. We also review patterns of the management and use of cash, the...

As the sole issuer of bank notes, the Bank of Canada conducts Methods-of-Payment (MOP) surveys to obtain a detailed and representative snapshot of Canadian payment choices, with a focus on cash usage. The 2017 MOP Survey is the third iteration. This paper finds that the overall cash volume and...

We present key results from the 2023 Methods-of-Payment (MOP) Survey, including updated payment shares based on a three-day shopping diary. Results show that measures of cash management and use have remained fairly stable since 2020, along with the estimated share of payments made online. In...

Motivated by the growing acceptance of electronic cryptocurrencies such as Bitcoin, I examine in a controlled, experimental laboratory setting, the acceptance of a secondary currency when a primary currency already circulates in an economy. The underlying model is an indivisible...

This paper examines a mechanism of liquidity-preference fluctuations caused by changes in people's belief about a random liquidity shock. When observing the shock, they rationally update their belief so that the shock probability is higher; consequently they raise liquidity preference and reduce...

In a simple continuous-time model where the learning process affects the willingness to hold liquidity, we provide an intuitive explanation of business cycle asymmetry and post-crisis slow recovery. When observing a liquidity shock, individuals rationally increase their subjective probability of...

Firms and consumers both hold significant amounts of money, and the firm share changes over time and is negatively correlated with inflation. While existing studies of monetary policy and unemployment only consider consumer money, we build a quantitative framework of money allocation between...

We develop a model of monetary exchange that avoids several common criticisms of the recent microfoundations literature. First, rather than random matching, we assume that buyers know the location of all sellers, and hence the process of finding a partner is deterministic, although trade is...