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Title: Immigration and large banknotes

Author(s): Andreas M Fischer

Publication Date: October 2010

Keyword(s): hoarding, immigration, large banknotes and money demand

Programme Area(s): International Macroeconomics

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 eects linked to immigrants.

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Bibliographic Reference

Fischer, A. 2010. 'Immigration and large banknotes'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8065