Archive for September 2nd, 2013

Currency usage in India over the years …(how Rs 500 has become the new Rs 100..)

September 2, 2013

I like RBI’s annual report for three main things:

I have tried analysing the currency trends last year as well. One clearly saw a shift from Rs 100 which was the dominant higher denomination note  to notes of Rs 500 and Rs1000.  This years report is no different and shows continuation of the trend. I had expected this rise because of inflation and black money..

So this year I compiled the usage series from 2003-04 onwards to get a more long term picture. The analysis shows some interesting trends:

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Why was Fed created? To solve the currency problem….

September 2, 2013

A must read speech by Jeff Lacker of Richmond Fed.  As Fed celebrates its 100 years in 2013, we are getting some really interesting thing to read and follow on central banking.

Most have looked at Fed history from a mon pol angle. Lacker points to another interesting perspective, He says Fed was created to solve the in-elasticity problem of currency:

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