Federal
Economics
Policy
The Penny Dilemma
Federal Reserve Bank of Atlanta
Published: June 23, 2025
Source Overview
The Atlanta Fed examines the economic implications of penny elimination, including effects on inflation, pricing behavior, and low-income consumers.
Key Takeaways
- Rounding effects are statistically neutral over time
- Low-income consumers may be disproportionately affected
- Cash transaction volume continues to decline
- International examples show smooth transitions are possible
Our Two Cents
The Atlanta Fed's analysis provides crucial data for understanding the distributional effects of rounding, particularly for cash-dependent populations.
Open Questions
- ?Should targeted protections be implemented for vulnerable populations?
- ?How will retailers adjust pricing strategies?
Share this analysis or cite it in your work: