ADDING MYSTERY TO THE CASE OF THE MISSING CURRENCY

The Fedeal Reserve Bank reports that approximately $300 billion worth of United States currency was in circulation in 1992. Yet based on hou sehold survey, and other information, households and firms in the coun try claim to hold only a fifth of this total. A recent article by Spre nkle argues that the ''missing currency'' is largely held outside the United States. It is implausible that most of the missing currency is held outside the United States; with simile adjustments we are able to explain the whereabouts of about half of all the currency in circulat ion. Even these adjustments would imply very large overseas holdings o f dollars, so we suspect that people hold surprisingly large amounts o f currency; why this should be so is not yet fully understood.