The Fate of One-Dollar Coins in the U.S. by Sébastien Lotz and Guillaume Rocheteau
October 15, 2004* Federal Reserve Bank of Cleveland The Fate of One-Dollar Coins in the U.S. by Sébastien Lotz and Guillaume Rocheteau In 1997, the U.S. Dollar Coin Act hands, what economists call its velocity. authorized the introduction of a new Since paper money has a low production The United States has introduced two dollar coin, and in January 2000, the cost but is less durable than metallic one-dollar coins in the past 25 years, coin was released to the public. The new money, it is well suited for large denomi- both of which have not circulated coin, called the golden (Sacagawea) nations that do not circulate frequently. dollar because of its color, aimed to In contrast, coins, which cost more to widely. Many other countries have replace another one-dollar coin intro- produce, are better suited for small replaced lower-denomination notes duced in 1979, the Susan B. Anthony denominations that have a high velocity with coins and have achieved wide dollar, and, ultimately, the one-dollar and are subject to greater wear. circulation and cost savings. Lessons bill. The Anthony and golden dollar from those countries suggest that coins have several characteristics in In most countries, the stock of currency is achieving widespread use of a dollar composed of both coins and notes (paper common: Their size, weight, and elec- coin is much harder if the note is or, as in Australia, polymer money). But tromagnetic properties are the same, and allowed to remain in circulation. both coins portray famous women in countries differ in where they set their U.S.
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