Edoardo Rainone (Banca d’Italia) - Cash Demand under Low Interest Rates

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Despite the fact that electronic and digital payments are increasingly catching on, cash is still very popular among people. The recent increase of banknotes in circulation in several countries has been often associated to the low interest rates environment, but formal empirical evidence of such relationship is still scarce in the literature. Italy is one of the most cash-loving countries, which makes it a perfect case to study the behavior of people under zero and negative policy rates. We empirically study the demand for cash in Italy from 2010 to 2017, under declining interest rates. Exploiting two asynchronous reforms in the Italian law, involving the tax monitoring system and payment limits, we are also able to disentangle the demand for pure store of value-function from the demand for the transactional function of cash.

Freitag, 15. März 2019, 11.00 Uhr

Oesterreichische Nationalbank
Otto-Wagner-Platz 3, 1090 Wien
Veranstaltungssaal, EG

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