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Publications on Banknotes & coins

22 March 2021
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 2, 2021
Details
Abstract
What explains the strong growth of euro banknote demand, given that the transactional use of banknotes seems to have decreased? Key to explaining this phenomenon – referred to as the “paradox of banknotes” – is acknowledgement of the importance of all three components of banknote demand: euro area transactional demand, euro area store-of-value demand and foreign demand. This article explains these components and estimates their relative size. It also addresses COVID-19-related banknote developments during 2020, highlighting the importance of cash during crises.
JEL Code
E41 : Macroeconomics and Monetary Economics→Money and Interest Rates→Demand for Money
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
2 December 2020
OTHER PUBLICATIONS
24 September 2018
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 6, 2018
Details
Abstract
This article presents the developments in the circulation of euro banknotes and the underlying drivers of cash demand in the euro area and abroad. Cash in circulation is on the rise, both in the euro area and abroad. In addition, data from a survey on the use of cash in the euro area indicates that by volume and number of transactions cash remained the most used payment instrument in 2016. However, the growth in banknote circulation can only partially be explained by transaction demand. Most euro banknotes in circulation are used as a store of value and households and firms inside and outside of the euro area obviously value the option of storing part of their assets in central bank money. Considering the currently low opportunity costs of holding cash, the stored euro banknotes can be expected to return if interest rates were to increase. However, as shown by developments over the past ten years, the store of value function is determined not only by interest rates, but also by external events which cannot be predicted. The demand for banknotes has also been impacted by various additional factors such as the financial and sovereign debt crises, geopolitical uncertainties, exchange rate developments and policy decisions
JEL Code
D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis
E41 : Macroeconomics and Monetary Economics→Money and Interest Rates→Demand for Money
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
Network
Eurosystem Research Network on Cash (EURECA)
20 September 2017
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 06, 2017
23 July 2015
OTHER PUBLICATIONS
26 March 2015
OTHER PUBLICATIONS
14 April 2011
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 4, 2011
21 April 2009
OTHER PUBLICATIONS
21 April 2009
OTHER PUBLICATIONS
29 May 2008
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 5, 2008
21 April 2008
OTHER PUBLICATIONS
21 April 2008
OTHER PUBLICATIONS
11 October 2007
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 10, 2007
23 April 2007
OTHER PUBLICATIONS
23 April 2007
OTHER PUBLICATIONS
12 April 2007
OTHER PUBLICATIONS
21 December 2006
OTHER PUBLICATIONS
7 August 2006
OTHER PUBLICATIONS
25 April 2006
OTHER PUBLICATIONS
13 January 2006
OTHER PUBLICATIONS
11 August 2005
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 8, 2005
26 April 2005
OTHER PUBLICATIONS
6 January 2005
OTHER PUBLICATIONS
12 August 2004
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 8, 2004
27 April 2004
OTHER PUBLICATIONS
1 September 2003
OTHER PUBLICATIONS
17 July 2003
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 7, 2003
10 April 2003
OTHER PUBLICATIONS
23 January 2003
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 1, 2003
29 October 2002
OTHER PUBLICATIONS
30 June 2002
OTHER PUBLICATIONS
24 May 2002
OTHER PUBLICATIONS
9 May 2002
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 5, 2002
10 April 2002
OTHER PUBLICATIONS
Related
1 April 2002
OTHER PUBLICATIONS
24 January 2002
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 1, 2002
18 October 2001
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 10, 2001
1 May 2001
OTHER PUBLICATIONS
19 April 2001
ECONOMIC BULLETIN ARTICLE
Economic Bulletin Issue 4, 2001
1 April 2000
OTHER PUBLICATIONS
9 November 1999
OTHER PUBLICATIONS
1 April 1999
OTHER PUBLICATIONS

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