European hoarding: currency use among immigrants in Switzerland

Andreas Fischer (afischer@liuc.it)

No 35, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: Do immigrants have a higher demand for large denominated banknotes than natives? This study examines whether cash orders for CHF 1000 notes, a banknote not used for daily transactions, is concentrated in Swiss cities with a high foreign-to-native ratio. Controlling for a range of socio-economic indicators across 250 Swiss cities, European immigrants in Switzerland are found to hoard less CHF 1000 banknotes than natives. A 1 percent increase in the immigrant-to-native ratio leads to a reduction in currency orders by CHF 4000. This negative correlation between immigrant-to-native ratio and currency orders for CHF 1000 notes holds irrespective of the European immigrants' country of origin. Hoarding of large denominated banknotes by natives is attributed tax avoidance.

Keywords: Money; Immigrants; Bank notes; Monetary policy (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-mig and nep-mon
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