What happens when a currency note gets lost?

Question

So imagine I lost a note of $10 and it somehow burns or anything that makes it disappear forever, what impact does this have on the economy or anything?

In: 0

Answer 1

You just created deflation. You decreased the amount of money in circulation. That means the rest of the money in circulation is worth more now.

That said, there’s an estimated $2.1 trillion in circulation. That $10 represents about 0.0000000004% of the money circulating in the economy. It’s inconceivable that you could ever destroy enough physical currency to have a real deflationary effect on the economy.