Immigration and Large Banknotes

46 Pages Posted: 22 Nov 2010

See all articles by Andreas M. Fischer

Andreas M. Fischer

Swiss National Bank; Centre for Economic Policy Research (CEPR)

Date Written: October 2010

Abstract

Do immigrants have a higher demand for large denominated banknotes than natives? This micro study examines whether banknote orders for CHF 1,000 notes, a banknote used for storage purposes, is concentrated in Swiss municipalities with a high foreign-to-native ratio. The evidence for 251 Swiss municipalities finds that immigrants hoard fewer CHF 1,000 banknotes than natives. This result means that immigration reduces seigniorage (per person) as measured by banknote orders. A 1% increase in the immigrant-to-native ratio is coincident with a reduction in banknote orders by CHF 4,000. This reduction is attributed to wealth and age effects linked to immigrants.

Keywords: hoarding, immigration, large banknotes, money demand

JEL Classification: E41, E69

Suggested Citation

Fischer, Andreas M., Immigration and Large Banknotes (October 2010). CEPR Discussion Paper No. DP8065, Available at SSRN: https://ssrn.com/abstract=1711078

Andreas M. Fischer (Contact Author)

Swiss National Bank ( email )

Borsenstrasse 15
CH-8022 Zurich
Switzerland
+41 1 631 3294 (Phone)
+41 1 631 3901 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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