For example, the Big Mac index of the UK is £3.09, which is fairly reasonable for coins (£2 + £2 + 10p).
For Switzerland, it's 6.50Fr, so 5Fr + 1Fr + 0.5Fr.
But for the US, it's $5.06, which needs the paper $5.
Of course nobody uses them. Their wallets are filled with bills. That they keep printing. Then they announce a coin that will surely be cancelled in a few months, and collectors jump on it.
Americans would use a $1 coin if the deployment strategy wasn't garbage, condemning them to collector status almost immediately.
In any case, at this point in history, it would seem to make little sense to overhaul currency denominations.
- banks have to introduce the new coins in quantity
- banks have to collect the old bills for return to the treasury
- cash registers have to be redesigned and replaced
- vending machines need to be updated to accept the new coins
- businesses have to stock the new coins to give out as change
- pricing and accounting may have to be updated to handle new rounding rules
Especially with so many transactions going electronic, it also seems an odd time to make an expensive and disruptive currency shift even if there were some small net positive.
Wouldn't the effort be better spent on stored value cards? (Though I wonder if even the time for that is getting past given smartphone payments.)
Traveling to Europe I found the euro coins to be much more convenient.
Here in the Netherlands we don't really use the 1 and 2 eurocent coins anymore. It was decided that they're just annoying, so (almost?) all shops always round prices to the nearest amount that can be divided by 5 cents (Only when you pay with cash, electronic payments are not rounded. Naturally you can still pay with 1 and 2 cent coins, you'll just never get them back as change). I visit Germany a couple of times a year and it always surprises me they're still bothering with those 1 and 2 cent coins.
Just shift up an order of magnitude for physical payment.
The FED is targeting 2% inflation a year so every century or so we should shift an order of magnitude in value.
Why not carry usable amounts of cash in coins instead? You pay in coins and you get coins back in change. Of course that doesn't work if need to carry larger denominations, but if you're going to buy lunch or pop down to the liquor store it's more convenient, IMO.
Coins are easier to tell apart, and I never like the grubby $1 bills I get in the USA. But, I don't often use cash either -- mostly when splitting the bill in a restaurant, since it's easier to hand the waiter 200kr than have everyone use the card terminal in turn to pay their exact 194.23kr share.
Have just spent a month in the USA for the first time, I found that the only reason coins < 25c were used were when change was given. And this was only the case because adding tax to the price made most prices having unrounded final amounts. In Australia, all prices are quoted including tax, which means that prices can be rounded, and so the need for coins in minimised.
I love the mathematical slant of this paper, but it'd make much more sense to try and get rid of the need for coins.
Perhaps, the USA could remove all coins except for quarters?
The US got rid of the half cent when it couldn't be used to buy anything of worth. Inflation adjusted, it had the value of 14 cents. I've started to leave pennies, nickels, and dimes in the "leave a penny, take a penny" holders.
Half cents! ha ha... I find it funny how US petrol stations quote gas to the tenth of a cent. Such as $3.39 9/10 a gallon.
I also found it really difficult having all the paper notes the same colour. I'd look in my wallet and I couldn't tell whether I had hundreds of dollars, or just ten one dollar bills. The poor shop keepers who had to wait for me to look at each bill and coin individually before handing them over :-p
I did not look into the actual distribution of prices and just supposed that every value was equally probable.
Noting that this is from 2003, before many stores introduced the automatic changer, I'm not sure if the 17% increase in efficiency would make a huge difference.
Humans themselves aren't efficient, and many registers across America aren't designed to be an assembly line with no niceties.
One would think the 50c coin would be in wider circulation than it is, so I'm assuming the authors are correct that the odd denomination wouldn't see large acceptance.
An extreme example is that Japanese yen are denominated as 1, 5, 10, 50, 100, 500, 1000, 2000(uncommon), 5000, 10000. But I noticed that it takes a lot of 1's to pay or make change, whereas the 5's are less used.
What if we use denominations like 1 and 3 instead? The benefit is that the ratio 1:3 is similar to the ratio 3:10, so they are more evenly spaced on a logarithmic scale. Specifically, I'd like to explore what happens if the denominations are 1, 3, 10, 30, 100, 300, 1000, 3000, etc...
I would bet that 18c would get labeled a devil's coin by some.
Of course, I'm one of those folks who would like to to see the $1, $5, and $10 bills replaced with coins. Might be nice to follow the example of some of the Chinese coins and have a hole in the middle for convenience.
Is it though? You're going to save a few random seconds here and there, not big chunks of time. Plus it's not like the change making process is hugely slowing down checkout lines.
It should be called "What THAT country needs is an 18c piece"!
They suggest "optimizing" Canadian change with an 83-cent piece... which of course makes no sense once the penny is eliminated, so now there must be a different optimal coin.