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Currency movements within and outside a currency union: The case of Germany and the euro area

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  • Seitz, Franz
  • Rösl, Gerhard
  • Bartzsch, Nikolaus

Abstract

In this paper, we analyze the volume of euro banknotes issued by Germany within the euro area with several seasonal methods. We draw a distinction between movements within Germany, circulation outside Germany but within the euro area and demand from non-euroarea countries. Our approach suggests that only about 20% of euro notes issued by Germany are used for transactions in Germany. The rest is hoarded (10%), circulates in other euro area countries (25%) or is held outside the euro area (45%). -- In dem vorliegenden Papier analysieren wir die Emissionen von Euro-Banknoten durch die Deutsche Bundesbank anhand verschiedener saisonaler Ansätze. Wir unterscheiden zwischen der Nachfrage aus Deutschland, der Haltung in anderen Euro-Ländern und Umlauf außerhalb des Euro-Währungsgebiets. Es stellt sich heraus, dass nur ca. 20 % der emittierten Banknoten für Transaktionszwecke in Deutschland gebraucht werden. Der Rest wird aus unterschiedlichen Gründen gehortet (10 %), läuft in anderen EWU-Ländern um (25 %) oder wird außerhalb des Euro-Raums gehalten.

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Bibliographic Info

Paper provided by University of Applied Sciences Amberg-Weiden (OTH) in its series OTH im Dialog: Weidener Diskussionspapiere with number 30.

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Date of creation: 2011
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Handle: RePEc:zbw:hawdps:30

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Web page: http://www.oth-aw.de/

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Keywords: Banknotes; euro; foreign demand; hoarding; transaction balances;

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  1. Hans-Werner Sinn & Timo Wollmershäuser, 2012. "Target loans, current account balances and capital flows: the ECB’s rescue facility," International Tax and Public Finance, Springer, Springer, vol. 19(4), pages 468-508, August.
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  4. Seitz, Franz, 2007. "A simple way to capture transaction balances," Economics Letters, Elsevier, Elsevier, vol. 95(2), pages 230-233, May.
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  7. Donald S. Allen, 1998. "How closely do banks manage vault cash?," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Jul, pages 43-54.
  8. Aksoy, Yunus & Piskorski, Tomasz, 2006. "U.S. domestic money, inflation and output," Journal of Monetary Economics, Elsevier, Elsevier, vol. 53(2), pages 183-197, March.
  9. Edgar L. Feige, 2003. "The Dynamics of Currency Substitution, Asset Substitution and De facto Dollarization and Euroization in Transition Countrieses," Macroeconomics, EconWPA 0305003, EconWPA.
  10. Doris Schneeberger & Gabriele Süß, 2007. "Austria’s Experience with Euro Migration since the Cash Changeover," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 128–137.
  11. Richard D. Porter & Ruth A. Judson, 1996. "The location of U.S. currency: how much is abroad?," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 883-903.
  12. Haughton, Jonathan, 1995. "Adding mystery to the case of the missing currency," The Quarterly Review of Economics and Finance, Elsevier, Elsevier, vol. 35(35), pages 595-602.
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