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Immigration and large banknotes

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  • Andreas M. Fischer

Abstract

Do immigrants have a higher demand for large denominated banknotes than natives? This micro study examines whether cash orders for CHF 1,000 notes, a banknote used for storage purposes, is concentrated in Swiss municipalities with a high foreign-to-native ratio. Controlling for a range of regional indicators across 251 Swiss municipalities, European immigrants in Switzerland are found to hoard less CHF 1,000 banknotes than natives. This result says that immigration reduces seigniorage (per person) as measured by currency orders. A 1% increase in the immigrant-to-native ratio is coincident with a reduction in currency orders by CHF 4,000. The dampening effect is attributed to specific traits linked to immigrants.

Suggested Citation

  • Andreas M. Fischer, 2010. "Immigration and large banknotes," Working Papers 2010-17, Swiss National Bank.
  • Handle: RePEc:snb:snbwpa:2010-17
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    References listed on IDEAS

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    Cited by:

    1. Kathrin Degen & Andreas M. Fischer, 2017. "Immigration and Swiss House Prices," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(1), pages 15-36, January.
    2. Khraiche, Maroula, 2015. "A Macroeconomic Analysis Of Guest Worker Permits," Macroeconomic Dynamics, Cambridge University Press, vol. 19(01), pages 189-220, January.
    3. Geoffrey R. Dunbar, 2014. "Demographics and the Demand for Currency," Staff Working Papers 14-59, Bank of Canada.
    4. Assenmacher, Katrin & Seitz, Franz & Tenhofen, Jörn, 2017. "The use of large denomination banknotes in Switzerland," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 162917, Deutsche Bundesbank.
    5. Kosse, Anneke & Jansen, David-Jan, 2013. "Choosing how to pay: The influence of foreign backgrounds," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 989-998.

    More about this item

    Keywords

    immigration; large banknotes; hoarding; money demand;

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other

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