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IMMIGRATION AND LARGE BANKNOTES

Published online by Cambridge University Press:  12 November 2012

Andreas M. Fischer
Andreas M. Fischer*
Affiliation:
Swiss National Bank
*
Address correspondence to: Andreas M. Fischer, Swiss National Bank, International Trade and Capital Flows, Postfach, 8022 Zurich, Switzerland; e-mail: andreas.fischer@snb.ch.
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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 are 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 empirical 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 specific traits linked to immigrants.

Keywords

ImmigrationLarge BanknotesHoardingMoney Demand
Type
Articles
Information
Macroeconomic Dynamics , Volume 18 , Issue 4 , June 2014 , pp. 899 - 919
Copyright
Copyright © Cambridge University Press 2012 

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