a more detailed explanation, see Bartzsch, Rösl and Seitz (2011), section 3.3.
12 This could, of course, be countered by the argument that the euro cash changeover led to structural changes
and a cor
been ill-advised to respond strongly to real-time estimates of
the level of the output gap. Of course, other potential feedback variables like the change
in the output gap, the rate of inflation [...] errors, we follow
Orphanides et al. (2000) and assume that they follow an AR(1) process. Of course, such
a first-order process represents a simplification of the true revision process in the data
in objectives and duration, are often associated
with a sharp and sustained redirection of the course of economic policy. An IMF supported
program is typically initiated when a country faces the [...] governance and
unsound fiscal balances. In the case of Ireland fiscal rescue packages that in the course of the
financial and economic crises were necessary to stabilize the domestic banking system
017590α β= = . Thus, the probability that a €1 coin located in Germany
will flow abroad in the course of one year is 5%, and the probability that a coin located
abroad will flow to Germany 1.8%.
derived from our cointegration relation. Figure 3 shows
that bond markets were overvalued in the course of 2004/2005. But obviously the
"disequilibria" is not unusual in historical perspective. Our
key question is why foreign demand for euro
banknotes is primarily met by Germany. There are of course a number of historical reasons
(Deutsche Bundesbank 2009), such as Germany’s strong involvement
autonomous liquidity factors 12
3.1 Government deposits 13
3.2 Banknotes 15
3.3 Net float (�items in course of settlement�) 19
3.4 Other autonomous factors 21
4 The endogenous liquidity factors 25
4.1 [...] causality from prices to quantities in this market.2
The first 18 months of Stage Three of EMU were of course a special period which was at least partially
influenced by an ongoing learning process. However [...]
ECB Working Paper No 44 � February 200110
� Autonomous liquidity factors such as items in course of settlement (net float) (item 5), banknotes
(item 6), other autonomous factors (item 7; the sum
is considered a
signal for a major swing in upcoming inflation
from an acceleration course onto a deceleration
course. Tables 6 and 7 show the performance of
the three slope variables in predicting German [...] Chicago Press,prevent inflation from getting onto an accelera-
Chicago, pp. 157–202.
tion course when such a course is likely to Berk, J. M. (1998). The information content of the yield
come. Interest rate [...] of a state changes very
cal heteroskedasticity (French & Sichel, 1993; promptly from 0 to 1 in the course of no more
10Lahiri & Wang, 1996) . Finally, following than 3 months. For exact dating of the
euro banknotes circulating in Germany have been put
into circulation by the Deutsche Bundesbank. Of course, due to
4 For countries importing foreign cash, see Feige (2003).
5 However, estimates in literature [...] seems to be a special demand for
banknotes issued by the Deutsche Bundesbank which has grown
in the course of time. Fig. 4 shows that the evolution over time
of the German issuance was not only more dynamic [...] these results is why foreign
demand for euro banknotes is primarily met by Germany. There are
of course a number of historical reasons (Deutsche Bundesbank,
2009), such as Germany’s strong involvement
Source: ECB (2012a), p. 85.
The ECB (2012a) conducted an evaluation of 130 such studies in the course of a me-
ta-analysis. The findings are illustrated in Figure 1. It is clearly evident that the usage [...] transactions effected by the people questioned (2011: 2,098 people, 2008: 2,204
people) over the course of a week during which they kept a payments diary. The figures can be regarded as
representative [...] securities settlement statistics. They contain data on all the
amounts withdrawn in Germany over the course of a year. The figures consequently
also make reference to cash withdrawn for purposes other than
monetary policy decisions, since some of the relevant data and estimates undergo
major revisions in the course of time. By re-estimating policy reaction functions for the
Fed, Orphanides has shown that the use
earlier edition of this book. They discovered
many unclear passages and holes in our arguments. Of course, all remaining errors and omissions are
ours alone. We would like to thank Ms. Iris Röckelein for
the
smallest in the EU. Its very new economics departement has 24 employees and and there is, of
course, no separate research departement. The National Bank of Belgium has also no research
department [...] far, the highest ratio between the economic and research
staff and the total staff. This is, of course, a consequence of the fact that the ECB plays a key role
in formulating monetary policy, while national [...] professional life) were also counted.
17 Of course, not all international journals can be considered to be top, very good or good journals. These other
value’ of
10Y Treasury yields. Figure 5 shows that bond
markets were indeed overvalued in the course of
2005, but apparently this ‘disequilibrium’ was not
unusually high in historical perspective
thank JoÈrg Clostermann and Stefan Kuhnert for helpful
comments. All remaining errors are ours, of course.
REFERENCES
Brand, C. and N. Cassola (2000), `A Money Demand System for Euro Area M3', ECB
a decline is compensated
for by an increase in trend productivity growth. This result, which of course entails a high degree
of uncertainty, would suggest that a rebalancing of the supply-side determinants [...] model in a two-year horizon and the
conditional forecasts, where a 1% drop in the wage level in the course of the first year (2010)
has been assumed. Such a drop is obtained by reducing the wage rate in [...] gravity equations is inappropriate for bilateral
flows where parts and components are important. Of course, if the consumer- and producer-
demand moves in synch – as they may in a steady-state situation –
1 This tendency was even intensified in the course of the Covid-19 pandemic, see Ashworth & Goodhart (2021)
and Rösl & Seitz (2021).
2 Schrooten [...] being a net exporter or net importer of banknotes within the euro area can even change
in the course of time. As a rough proxy for this effect, we take the net issues of the euro area
countries [...] pandemic starting at the beginning of 2020 has once again proven the
importance of cash. In the course of the crisis, cash holdings have increased worldwide (see
figure 8 for the case of France as
want the central bank to put more emphasis on other objectives, such as reducing unemployment. Of course, this does not mean that the objective of achieving and maintaining price stability should be interpreted [...] even announced to publish an inflation and growth forecast of the Bank in the near future. But, of course, transparency does not mean publishing the maximum amount of information available.
num-Doc [...] Governing Council and a coherent summary of the information upon which decisions are based. But of course, transparency does not mean publishing the maximum amount of information available.
num-Doc_Paragraph
focuses on the special role of banks in the transmission of monetary policy. It states that in the course of a tight monetary policy banks reduce their credit supply because of the informational asymmetries [...] but was interrupted for a short time in the second half of 1980. Figure 2 also shows that in the course of German unification only relatively moderate (unanticipated) monetary policy shocks occured.
euro banknotes circulating in Germany have been put
into circulation by the Deutsche Bundesbank. Of course, due to
4 For countries importing foreign cash, see Feige (2003).
5 However, estimates in literature [...] seems to be a special demand for
banknotes issued by the Deutsche Bundesbank which has grown
in the course of time. Fig. 4 shows that the evolution over time
of the German issuance was not only more dynamic [...] these results is why foreign
demand for euro banknotes is primarily met by Germany. There are
of course a number of historical reasons (Deutsche Bundesbank,
2009), such as Germany’s strong involvement
lending in the interbank market."
Ähnlich argumentiert Papadia (2005, 51) für das Eurosystem: "Of course liquidity changes
have an effect on interest rates but the logical flow is not at all changing
hoarding purposes,
the demand for large denominations would increase more than for small ones.
Of course, this simple reasoning rests on a number of assumptions. First, one has to iden-
tify a base year [...] share based on a comparison of the
actual and theoretical lifespan of a banknote denomination. Of course, the lifespan of a banknote
is determined by many factors such as the frequency with which it [...] have had an
impact on the hoarding share of the CHF 100 note, which increased only later in the course
of the euro area crisis.27 From the early 1980s to the late 2000s, the hoarding share for the
been ill-advised to respond strongly to real-time
estimates of the level of the output gap. Of course, other potential feedback
variables, like the change in the output gap, the rate of inflation [...] in the MEs, we follow Orphanides et
al. (2000) and assume that they follow an AR(1) process. Of course, such a
first-order process represents a simplification of the true revision process in
the
2008. A more detailed
analysis of cash demand and crises for single
currencies is provided in due course.
Figures 1 and 2, respectively, show the
annual growth rates of cash holdings at a
global and
evolution of currency in the
course of 2001/2002 presents evidence in this respect as currency hoarding
and foreign currency holdings were to a large extent already reduced in the
course of 2001. Aksoy and Piskorski