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Narrow money and transaction technology: new disaggregated evidence

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  • Columba, Francesco

Abstract

This paper analyses the effect of transaction technology innovation on narrow money using Italian data disaggregated at provincial level. In particular, this study assesses the impact of the diffusion of ATMs (automated teller machines) and of POS (points of sale), on the demand for currency and on the demand for M1 using a unique data set. We find that transaction technology innovation has a negative effect on the demand for currency in circulation, while its effect on M1 is positive; additionally, heterogeneity in the use of cash within Italy is detected.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12689.

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Date of creation: 08 Jan 2009
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Handle: RePEc:pra:mprapa:12689

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Keywords: Currency; Demand for money; Financial innovation; Monetary aggregates;

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References

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Cited by:
  1. Hasan, Iftekhar & De Renzis, Tania & Schmiedel, Heiko, 2013. "Retail payments and the real economy," Working Paper Series 1572, European Central Bank.
  2. Susana da Silva Brito & Fátima Teresa Sol Murta, 2012. "The Effect of the ATM and the POS in the Demand for Money in Europe," Book Chapters, Institute of Economic Sciences.
  3. Hasan, Iftekhar & Schmiedel, Heiko & Song, Liang, 2009. "Return to retail banking and payments," Working Paper Series 1135, European Central Bank.

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