Narrow money and transaction technology: new disaggregated evidence

Columba, Francesco (2009): Narrow money and transaction technology: new disaggregated evidence. Forthcoming in: Journal of Economics and Business (2009)

Abstract

This paper analyses the effect of transaction technology innovation on narrow money using Italian data disaggregated at provincial level. In particular, this study assesses the impact of the diffusion of ATMs (automated teller machines) and of POS (points of sale), on the demand for currency and on the demand for M1 using a unique data set. We find that transaction technology innovation has a negative effect on the demand for currency in circulation, while its effect on M1 is positive; additionally, heterogeneity in the use of cash within Italy is detected.

• Item Type: MPRA Paper
• Language: English
• Keywords: Currency; Demand for money; Financial innovation; Monetary aggregates
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money

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