E41 - Demand for Money

• A Bitcoin Standard: Lessons from the Gold Standard

  Staff Working Paper 2016-14 Warren E. Weber

  This paper imagines a world in which countries are on the Bitcoin standard, a monetary system in which all media of exchange are Bitcoin or are backed by it. The paper explores the similarities and differences between the Bitcoin standard and the gold standard and describes the media of exchange that would exist under the Bitcoin standard.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): E-Money, Exchange rates, Financial services, Inflation and prices JEL Code(s): E, E4, E41, E42, E5, E58

• Estimating Canada’s Effective Lower Bound

  Staff Analytical Note 2015-2 Jonathan Witmer, Jing Yang

  In 2009, the Bank of Canada set its effective lower bound (ELB) at 25 basis points (bps). Given the recent experience of Sweden, Denmark, Switzerland and the euro area with negative interest rates, we examine the economics of negative interest rates and suggest that cash storage costs are the source of a negative lower bound on interest rates.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Central bank research, Monetary policy framework, Monetary policy implementation JEL Code(s): D, D5, D53, E, E4, E41, E43, E5, E58

• Government and Private E-Money-Like Systems: Federal Reserve Notes and National Bank Notes

  Staff Working Paper 2015-18 Warren E. Weber

  The period from 1914 to 1935 in the United States is unique in that it was the only time that both privately-issued bank notes (national bank notes) and central bank-issued bank notes (Federal Reserve notes) were simultaneously in circulation.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, E-Money, Financial services JEL Code(s): E, E4, E41, E42, E5, E58

• The Efficiency of Private E-Money-Like Systems: The U.S. Experience with National Bank Notes

  Staff Working Paper 2015-3 Warren E. Weber

  Beginning in 1864, in the United States notes of national banks were the predominant medium of exchange. Each national bank issued its own notes. E-money shares many of the characteristics of these bank notes.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, E-Money, Financial services JEL Code(s): E, E4, E41, E42, E5, E58

• Demographics and the Demand for Currency

  Staff Working Paper 2014-59 Geoffrey R. Dunbar

  I use data from the Bank of Canada’s Bank Note Distribution System and exploit a natural experiment offered by the timing of Easter in the Gregorian calendar to analyze the effects of demographic change for currency demand.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, Econometric and statistical methods JEL Code(s): C, C3, C31, C36, E, E4, E41

• The Role of Card Acceptance in the Transaction Demand for Money

  Staff Working Paper 2014-44 Kim Huynh, Philipp Schmidt-Dengler, Helmut Stix

  The use of payment cards, either debit or credit, is becoming more and more widespread in developed economies. Nevertheless, the use of cash remains significant.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, E-Money, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C35, C8, C83, E, E4, E41

• Retail Payment Innovations and Cash Usage: Accounting for Attrition Using Refreshment Samples

  Staff Working Paper 2014-27 Heng Chen, Marie-Hélène Felt, Kim Huynh

  We exploit the panel dimension of the Canadian Financial Monitor (CFM) data to estimate the impact of retail payment innovations on cash usage. We estimate a semiparametric panel data model that accounts for unobserved heterogeneity and allows for general forms of non-random attrition.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, E-Money, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C35, E, E4, E41

• Understanding the Cash Demand Puzzle

  Staff Working Paper 2014-22 Janet Hua Jiang, Enchuan Shao

  We develop a model to explain a puzzling trend in cash demand in recent years: the value of bank notes in circulation as a percentage of GDP has remained stable despite decreasing cash usage at points of sale owing to competition from alternative means of payment such as credit cards.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, Credit and credit aggregates, E-Money JEL Code(s): E, E4, E41, E5, E51

• Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

  Staff Working Paper 2014-20 John Bagnall, David Bounie, Kim Huynh, Anneke Kosse, Tobias Schmidt, Scott Schuh, Helmut Stix

  We measure consumers’ use of cash by harmonizing payment diary surveys from seven countries. The seven diary surveys were conducted in 2009 (Canada), 2010 (Australia), 2011 (Austria, France, Germany and the Netherlands), and 2012 (the United States).

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes, E-Money, Econometric and statistical methods, Financial services JEL Code(s): D, D1, D12, E, E4, E41, E5, E58

• 13 May 2014 Understanding Platform-Based Digital Currencies

  Bank of Canada Review - Spring 2014 Ben Fung, Hanna Halaburda

  Given technological advances and the widespread use of the Internet, various digital currencies have emerged. In most cases, Internet platforms such as Facebook and Amazon restrict the functionality of their digital currencies to enhance the business model and maximize their profits. While platform-based digital currencies could increase the efficiency of retail payments, they could also raise some important policy issues if they were to become widely used outside of the platform. Thus, it is important to closely monitor the evolution of these digital currencies.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Bank notes, E-Money, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42