More $100S Than $1S

Trivia inquiry for today: What denomination of U.S.A. currency has the largest release of bills inwards circulation? Up until 2016, the right answer was the $1 bill. Now, it's the $100 bill.

Here's the prove from Tim Sablik inwards "Is Cash Still King?" written for Econ Focus from the Federal Reserve Bank of Richmond (Second Quarter 2018, pp. 18-21). Back inwards the 1990s together with into the get-go decade of the 2000s, $1 bills were most common, alongside $20s inwards minute place. (This ranking accurately represents my  ain wallet, for what it's worth!). But $100s attain got increase steadily together with taken over get-go place.


Indeed, the full value of U.S.A. currency inwards circulation has been rising over time, but most of that gain inwards value is due to the ascent inwards $100 bills.



Clearly, in that location is a puzzle here. As Sablik points out, prove from consumer surveys finds that cash is used for well-nigh 27% of transactions inwards the final decade or so, but to a greater extent than frequently than non for minor purchases. It seems unlikely that the release of $100 bills inwards circulation is well-nigh typical consumers making typical purchases. In circular numbers, the 12 billion $100 bills inwards circulation divided past times a U.S.A. population of 325 i K m implies that on average, every somebody inwards the U.S.A. has 37 $100 bills inwards their possession. The full amount of U.S.A. cash inwards circulation plant out to well-nigh $4,800 for every somebody inwards the US. (This does non accurately correspond the contents of my wallet.)

The criterion explanation is that a considerable amount of U.S.A. currency is beingness used exterior the US, both every bit a medium of central together with every bit a shop of value. Some proportion of that amount--no i actually knows how much--is for sure helping to facilitate illegal activities. There are ongoing proposals to eliminate large-denomination bills: Sablik points out that the EU ended production of 500-euro notes inwards 2016.

For merely about previous posts on the subject, see:

• "Eliminate High-Denomination Bills?" (March 18, 2016)
• "The Soaring Number of $100 Bills" (June 10, 2013)

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