Synonyms
Definition
Cash demand is a demand for the legacy currency of a country which is exerted both by residents and nonresidents of a country.
Introduction
Cash demand and its peculiarities are defined followed by a comparison with the more encompassing money demand. Thereafter, the main economic influences on cash demand are explained. In the end, an outlook over future developments of cash demand is given which is threatened both by electronic inventions enhancing a cashless society and new developments in digital currencies.
The Meaning of Cash Demand
Cash demand is the demand for a currency, mostly banknotes. As coins constitute only a relatively small part of total cash demand and serve smaller payments, they are usually neglected in the analyses of overall cash demand. The demand for the legacy currency is, in general, influenced by the arguments which also drive macroeconomic money demand in a country. However, cash demand is specific, first, because the...
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References
Bartzsch N, Rösl G, Seitz F (2011) Foreign demand for euro banknotes issued in Germany: estimation using direct approaches. Deutsche Bundesbank discussion pa per series 1: economic studies No. 20/2011
Deutsche Bundesbank (2009) The development and determinants of euro currency in circulation in Germany. Mon Rep 6:45–58
Deutsche Bundesbank (2012) The usage, costs and benefits of cash – theory and evidence from macro and micro data. International Cash Conference 2012, Frankfurt
Deutsche Bundesbank (2021) Digitales Geld: Optionen für den Zahlungsverkehr, Monatsbericht April 2021
European Central Bank (2011) The use of euro banknotes – results of two surveys among households and firms. Mo Bull 4:79–90
European Central Bank (2020) Report on a Digital Euro, October 2020
Fischer B, Köhler P, Seitz F (2004) The demand for euro area currencies: past, present and future. In: European Central Bank working paper series, No. 330 April 2004
Lippi F, Secchi A (2009) Technological change and the households’ demand for currency. J Monet Econ 56(2):222–230
Further Reading
Bank for International Settlements (2020) Rise of the central bank digital currencies: drivers, approaches and technologies, Working Paper 880, August 2020
Ireland PN (2009) On the welfare cost of inflation and the recent behavior of money demand. Am Econ Rev 99:1040–1052
Walsh CE (2010) Monetary theory and policy, 3rd edn. MIT Press, Cambridge, MA
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Graf, G. (2022). Cash Demand. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_80-2
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DOI: https://doi.org/10.1007/978-1-4614-7883-6_80-2
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Chapter history
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Latest
Cash Demand- Published:
- 26 February 2022
DOI: https://doi.org/10.1007/978-1-4614-7883-6_80-2
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Original
Cash Demand- Published:
- 08 October 2014
DOI: https://doi.org/10.1007/978-1-4614-7883-6_80-1