Digital money is growing more popular and physical money is not being used as much as it once was. But what happens if we have a cashless society and what would it mean? The purpose of this essay is to investigate if increased technological innovation lead to a decrease in the currency in circulation and if there is a short or long term effect of innovation on currency in circulation. To answer the questions a fixed effects regression model is applied, based on panel data for 4 countries Sweden, Norway, Denmark and Finland for the time period 2007-2020. The regression's findings provide credibility to the hypothesis that increasing innovation has had a negative effect on currency in circulations. With the help of a Vector Error Correction Model with time series data for Sweden from 2007 to 2020, the second part of the question is answered. The result find evidence that increased innovation has a long-run decreasing effect on currency in circulation.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-50123 |
| Date | January 2022 |
| Creators | Forslin, Emma |
| Publisher | Södertörns högskola, Nationalekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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