What can biology tell us about transaction balances?

ABSTRACT

The total cash issuance of a central bank consists of domestic transaction and hoarding balances as well as foreign demand. The different shares are not known exactly. The introduction of the new Europa series of banknotes in the euro area offers the opportunity to calculate transaction balances with the help of a biometric method. Our results indicate that transaction balances are very low.

KEYWORDS:

• Euro banknotes
• biometric method
• transaction balances

JEL CLASSIFICATION:

• E41
• E58

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The shipments are processed by wholesale banks active in the international wholesale banknote market. The inpayments stemming from these shipments correspond to the random sample of fish from a lake mentioned earlier.

² Since Germany is a member of the euro rea, the term ‘abroad’ refers to two categories of country: other euro-area countries and non-euro-area countries. In this context, the biometric method therefore takes a different approach to that deployed by Porter and Judson for the United States.

³ The inpayments at the Bundesbank arising from shipments also include notes that were originally exported from Germany to non-euro-area countries through travel or remittances.