Breaking Up With M: Cashless Limits Under Limited Commitment by Tai-Wei Hu

Join us for this week's Macroeconomics Research Seminar, Spring Term 2026.

Tai-Wei Hu, from the University of Bristol, will present this week's Macroeconomics seminar on Breaking Up With M: Cashless Limits Under Limited Commitment.

Abstract

As economies become increasingly cashless, what are the welfare implications of eliminating cash? We study environments where money and credit coexist and the key friction is limited commitment. We characterize allocations and welfare as the economy is near-cashless and when cash is inexistent. When credit is sustained through record keeping, removing cash raises debt limits and welfare. When credit repayment is enforced by banks at some cost, the welfare effects from removing cash depend on market power and informational frictions: without frictions, aggregate welfare is unchanged but distributional effects arise; with informational asymmetries, aggregate welfare declines.

This seminar will be held on campus in 5B.307 at 1.30pm on Tuesday, 3 February 2026. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.