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A new framework for the elaboration of bill printing and coining programs

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Listed:
  • Rómulo Chumacero
  • Claudio Pardo
  • David Valdés

Abstract

This paper presents alternative models for forecasting the demand for bills and coins of different denominations. When compared to the models often used, the root mean squared forecasting error is reduced by as much as a factor of 15. The paper also develops a new framework to formulate the printing and minting programs by using density forecasts along with information on technological constraints and preferences of the policy maker.

Suggested Citation

  • Rómulo Chumacero & Claudio Pardo & David Valdés, 2007. "A new framework for the elaboration of bill printing and coining programs," Working Papers Central Bank of Chile 454, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:454
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_454.pdf
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    References listed on IDEAS

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    1. Sargent, Thomas J & Velde, Francois R, 1999. "The Big Problem of Small Change," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 137-161, May.
    2. Dean Croushore & Tom Stark, 2002. "Forecasting coin demand," Working Papers 02-15, Federal Reserve Bank of Philadelphia.
    3. Kohli, Ulrich, 1988. "A note on banknote characteristics and the demand for currency by denomination," Journal of Banking & Finance, Elsevier, vol. 12(3), pages 389-399, September.
    4. Massoud, Nadia, 2005. "How should Central Banks determine and control their bank note inventory?," Journal of Banking & Finance, Elsevier, vol. 29(12), pages 3099-3119, December.
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