The Amount of Cash in Circulation Soared Last Year

January 6, 2021

The amount of currency in circulation increased last year at a rate not seen since World War II.

As part of the fiscal and monetary response to the coronavirus, the total currency in circulation climbed to $2.07 trillion, according to the Federal Reserve. That amounts to an 11.6% increase from the year before and the largest one-year percentage increase since 1945.

Economists who spoke to CNBC say that historically such increases usually lead to strong economic growth. A peak in circulation growth generally coincides with the start of an economic cycle, they say, noting the end of downturns and recessions in 1983, 1991, 2002, and 2009, which all saw big increases in cash circulation.

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