At the ECB, the ratio of cash in circulation to GDP. Apart from special factors, this ratio has remained fairly stable in the developed economies over the decades, despite rising GDP. This is mainly explained by the fact that – cash is being replaced by sight deposits in current accounts (giro accounts) and remittances, – by cards and – even if still slowly, but steadily – by e-money. – It clearly follows that the central bank must also assume ultimate responsibility for the scarcity of book money. – On the other hand, however, it is empirically certain that with rising prosperity, more cash is held for investment purposes. – See banknote value restriction, cash, contingent cash, idle money, liquidity preference, reserve base. – Cf. Deutsche Bundesbank Monthly Report, July 2007, p. 16 f. (higher liquidity preference leads to higher cash ratio).
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