Among the many changes the pandemic has wrought on society, one very clear one is a hastening of the demise of cash. Notes and coin are used far less than 2 years ago, and the trend to a cashless society will only continue, with a range of electronic and technology-based payment methods jostling for space in consumers’ wallets. What does this plethora of payment options imply, and does it pose any threat to central banks and their role in the payment system?
The evidence is growing that inflation in western economies is going to be both higher than was at first predicted, and last for longer than was hoped. Yet central banks continue to claim that it is transitory, and seem very reluctant to do very much to counter it. Given that previous generations of central bankers were determined to act early and aggressively against threatened inflation, this needs some explaining.