This short review from Ben Fung and Enchuan Shao on the topic is so exciting to read. Frankly, I was unaware of some real good research in this area.
Canada recently issued Polymer currency notes. They are expected to be more secure, green (as in uses less carbon footprint) and last longer as well. BoC has been at work for a while to issue these polymer notes and the moment has come. More denomination notes to follow. There has been some useful research as well on the issue and this recent note is another fine example.
In this review, the authors explain how do economics really think about currency counterfeiting. There are two models- partial equilbrium and general equilibrium:
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