Paper money has its advantages

Sir, Kenneth Rogoff, in “Paper money is unfit for a world of high crime and low inflation,” (May 29) desires to eliminate “the zero bound on policy interest rates,” thus repeating the so-often expressed but incorrect economists’ notion that there is such a “zero bound”.

That he knows it is incorrect we find out in the next sentence, where the problem is said to be that central banks cannot set “rates too far below zero”. So the “zero bound” has become the “too far below zero bound,” quite a different “bound”. How far below zero “too far” is, he does not say.

Prof Rogoff goes on to wonder whether “governments could credibly issue an anonymous electronic currency” instead of paper money.

Whether or not one shares my personal preference for banknotes, one has to admit that with governments’ obvious propensity to spy on the citizens, it would take a very bold faith, indeed extreme credulity, to believe that any government would make or keep an electronic currency anonymous.

Alex J Pollock, Resident Fellow, American Enterprise Institute, Washington, DC, US

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Tuesday, September 16, 2014 | 5:00 p.m. – 6:00 p.m.
The Constitution as political theory

Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.

Wednesday, September 17, 2014 | 8:10 a.m. – Thursday, September 18, 2014 | 1:30 p.m.
Third international conference on housing risk: New risk measures and their applications

We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.

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Thursday, September 18, 2014 | 2:15 p.m. – 3:00 p.m.
Speaker of the House John Boehner on resetting America’s economic foundation

Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.

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Friday, September 19, 2014 | 9:15 a.m. – 11:00 a.m.
Reforming Medicare: What does the public think?

Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.

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