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European hoarding: currency use among immigrants in Switzerland

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  • Andreas M. Fischer

Abstract

Do immigrants have a higher demand for large denominated banknotes than natives? This study examines whether cash orders for CHF 1000 notes, a banknote not used for daily transactions, is concentrated in Swiss cities with a high foreign-to-native ratio. Controlling for a range of socio-economic indicators across 250 Swiss cities, European immigrants in Switzerland are found to hoard less CHF 1000 banknotes than natives. A 1 percent increase in the immigrant-to-native ratio leads to a reduction in currency orders by CHF 4000. This negative correlation between immigrant-to-native ratio and currency orders for CHF 1000 notes holds irrespective of the European immigrants' country of origin. Hoarding of large denominated banknotes by natives is attributed tax avoidance.

Suggested Citation

  • Andreas M. Fischer, 2009. "European hoarding: currency use among immigrants in Switzerland," Globalization and Monetary Policy Institute Working Paper 35, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddgw:35
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    File URL: http://dallasfed.org/assets/documents/institute/wpapers/2009/0035.pdf
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    Cited by:

    1. Kathrin Degen & Andreas Fischer, 2017. "Immigration and Swiss House Prices," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 153(I), pages 15-36, March.
    2. repec:fip:feddgm:00014 is not listed on IDEAS

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    Keywords

    Money ; Immigrants ; Bank notes ; Monetary policy;

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