Withering Cash: Is Sweden Ahead of the Curve or Just Special?

Hanna Armelius, Carl Claussen and André Reslow
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André Reslow: Sveriges Riksbank

International Journal of Central Banking, 2022, vol. 18, issue 4, 1-52

Abstract: Cash in circulation has increased in most countries but has fallen dramatically in Sweden. We explore the drivers behind this development using panel data consisting of 129 countries. In line with the previous literature, we find that GDP, demography, and the interest rate are key explanatory variables. A new finding is that lower corruption is associated with lower demand for cash in developed countries. Our empirical model performs relatively well in explaining the developments in most OECD countries. However, our model cannot explain the divergent Swedish development. We argue that a unique combination of events and policy measures have led to the decline of cash in Sweden.

JEL-codes: E41 E42 E51 (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Withering Cash: Is Sweden ahead of the curve or just special? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2022:q:4:a:3

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