Uncertainty, politics, and crises: The case for cash

Arbeitspapier

We analyze the repercussions of different kinds of uncertainty on cash demand, including uncertainty of the digital infrastructures, confidence crises of the financial system, natural disasters, political uncertainties, and inflationary crises. Based on a comprehensive literature survey, theoretical considerations and complemented by case studies, we derive a classification scheme how cash holdings typically evolve in each of these types of uncertainty by separating between demand for domestic and international cash as well as between transaction and store of value balances. Hereby, we focus on the stabilizing macroeconomic properties of cash and recommend guidelines for cash supply by central banks and the banking system. Finally, we exemplify our analysis with five case studies from the developing world, namely Venezuela, Zimbabwe, Afghanistan, Iraq, and Libya.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IMFS Working Paper Series ; No. 186

Classification and Topics

• Classification: Wirtschaft ; Demand for Money ; Money Supply; Credit; Money Multipliers ; Central Banks and Their Policies ; Comparative Studies of Countries
• Subject: Cash ; banknotes ; money ; crises ; stabilization ; uncertainty

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rösl, Gerhard ; Seitz, Franz
• Event: Veröffentlichung
• (who): Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)
• (where): Frankfurt a. M.
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/273081
• Last update: 10.03.2025, 11:42 AM CET