Florin, crown, schilling and euro: an overview of 200 years of cash in Austria

This article provides an overview of the supply and demand for cash in Austria over the past 200 years. After looking at the government, mint and central bank as cash providers and tracing the composition of cash supply, the article presents several stylized facts about the long-run evolution of cash demand. Results show a relatively stable currency-to-GDP ratio, which is remarkable, given the structural changes in the economy and advances in payment Technologies over the past 200 years. Among possible explanations is that innovations have significantly increased the use of close cash substitutes like deposits without, however, reducing the currency-to-GDP ratio. Second, factors like the increasing monetization of the economy during the 19th century might have compensated for the cash-saving impact of financial innovations. Moreover, most of the demand for cash might not be susceptible to payment innovations as it is driven by hoarding. Finally, large political disruptions i.e. times of elevated economic uncertainty, and systemic banking crises exert strong and persistent effects on the use of cash.