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Economic Quarterly

Winter 1993

Should We Subsidize the Use of Currency?

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Although it is costly to process deposits of used currency and to replace unfit notes with new notes, the Fed performs these tasks free of charge. Economic efficiency suggests that the Fed should charge a currency deposit fee and should remove rationing constraints on currency deposits and withdrawals.

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Lisa Davis (804) 697-8179

Economic Quarterly

Should We Subsidize the Use of Currency?

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