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Economic Quarterly

Oct. 17, 2018

Richmond Fed’s Economic Quarterly Looks Into the Decline in Currency Use at a National Retail Chain

In the latest Economic Quarterly, Richmond Fed economists Zhu Wang and Alexander Wolman identify a decline in cash usage for retail payments over a four-year period. They look at data from 2011 and 2015 to study why there has been this shift from cash to credit and debit cards at a large nationwide discount retailer.

Wang and Wolman find that much of the decline in cash usage is likely due to improvements to credit and debit cards and evolving consumer perceptions of cards due to those improvements. The shift is explained to a lesser degree by an increase in the size of transactions, as cash is mostly used for smaller purchases, and by location-specific demographic changes. However, they note that their observations may be common to the stores studied in this paper but not to the broader U.S. economy.

This article and others in the latest issue of Economic Quarterly are available on our website.

Also in this issue:

  • Idiosyncratic Sectoral Growth, Balanced Growth, and Sectoral Linkages by Andrew Foerster, Eric LaRose, and Pierre-Daniel Sarte

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. More information is available at (800) 322-0565 or online.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.


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