Not only is a cashless society farther away than some think, we are actually seeing an increase in the use of cash all over the world. Off-the-books activity also helps explain a mystery about the current economy: even though the % of Americans officially working has dropped dramatically, and even though household income is still well below what it was in 2007, personal consumption is higher than it was before the recession, and retail sales have been growing briskly. The difference probably reflects workers migrating into the shadow economy. “It’s typical that during recessions people work on the side while collecting unemployment. But the severity of the recession and the profound weakness of this recovery may mean that a lot more people have entered the underground economy, and have had to stay there longer.”

• Uncategorized