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Explaining Unusual Cash Patterns in 2018

Author

Listed:
  • Walter Engert
  • Ben Fung
  • Jozsef Molnar
  • Gradon Nicholls

Abstract

There was an unusually large decline of bank notes in circulation in October 2018. Some have argued that this was due to the legalization of cannabis in Canada in mid-October. We consider whether that explanation is consistent with the evidence and conclude that the unusual cash patterns observed in 2018 are more likely the result of an operational event specific to Toronto. Nevertheless, it would be useful to continue monitoring developments in cannabis consumption and its impact on the demand for cash.

Suggested Citation

  • Walter Engert & Ben Fung & Jozsef Molnar & Gradon Nicholls, 2019. "Explaining Unusual Cash Patterns in 2018," Staff Analytical Notes 2019-22, Bank of Canada.
    • Handle: RePEc:bca:bocsan:19-22
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    References listed on IDEAS

    as
    1. Gerrit Bilkes, 1997. "The new bank note distribution system," Bank of Canada Review, Bank of Canada, vol. 1997(Summer), pages 41-54.
    2. Goodhart, Charles & Ashworth, Jonathan, 2019. "Canadian Legalization of Cannabis reduces both its cash usage and ‘Black’ Economy," CEPR Discussion Papers 13448, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bank notes; Digital Currencies and Fintech; Financial services;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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