October 2022 issue contents
Withering Cash: Is Sweden Ahead of the Curve or Just Special?

Hanna Armelius,a Carl Andreas Claussen,b and André Reslowb
Confederation of Swedish Enterprise
Sveriges Riksbank


Cash in circulation has increased in most countries but has fallen dramatically in Sweden. We explore the drivers behind this development using panel data consisting of 129 countries. In line with the previous literature, we find that GDP, demography, and the interest rate are key explanatory variables. A new finding is that lower corruption is associated with lower demand for cash in developed countries. Our empirical model performs relatively well in explaining the developments in most OECD countries. However, our model cannot explain the divergent Swedish development. We argue that a unique combination of events and policy measures have led to the decline of cash in Sweden.

JEL Codes: E41, E42, E51.