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Banknote migration and the estimation of circulation in euro area countries: the italian case

Author

Listed:
  • Claudio Doria

    (Banca d'Italia)

  • Gianluca Maddaloni

    (Banca d'Italia)

  • Giuseppina Marocchi

    (Banca d'Italia)

  • Ferdinando Sasso

    (Banca d'Italia)

  • Luca Serrai

    (Banca d'Italia)

  • Simonetta Zappa

    (Banca d'Italia)

Abstract

In this paper we examine the difficulties faced by euro-area National Central Banks, since the changeover, in measuring banknote circulation in their respective countries, as a consequence of banknote migration across euro-area countries. Then, we describe a methodology for estimating Italian circulation, which integrates net issuance with information on banknote migration gathered from the Bank of Italy’s survey on international tourism. We also propose empirical approaches that can provide indications on migration and circulation for individual denominations as well. Since the changeover, Italian circulation has increased significantly. Inflows from abroad have been recorded for all denominations, except for the €50 banknote. Circulation has been increasingly concentrating on medium denominations (€20 and €50); high ones (€100, €200 and €500) have been marginalized, while the use of lower ones (€5 and €10) has gradually decreased. These trends mainly reflect limits on cash payments and anti-money laundering controls.

Suggested Citation

  • Claudio Doria & Gianluca Maddaloni & Giuseppina Marocchi & Ferdinando Sasso & Luca Serrai & Simonetta Zappa, 2023. "Banknote migration and the estimation of circulation in euro area countries: the italian case," Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) 40, Bank of Italy, Directorate General for Markets and Payment System.
    • Handle: RePEc:bdi:wpmisp:mip_040_23
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    More about this item

    Keywords

    Cash; Touristic flows; ATM; money laundering;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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