Professor Franz Seitz teaches Economics with a special focus on Monetary Policy and Financial Markets at Weiden Technical University of Applied Sciences in Germany. He is author of numerous articles in national and international journals. His main fields of research are monetary theory and policy, financial markets as well as payments markets, especially cash in circulation. For many years now, Professor Seitz is acting as a consultant in different projects for central banks, commercial banks and financial as well as non-financial corporations.

AThe Ostbayerische Technische Hochschule Amberg-Weiden (OTH – Technical University of Applied Sciences) is located in the Upper Palatinate, an administrative district of the federal state of Bavaria. It is home to four departments on two campuses in Amberg and Weiden, respectively, about 40 kilometers apart. It has approximately 3,500 students and an academic staff of 83.

 

Stability in an uncertain world: The case for cash

A comparison of the Great Depression and the Great Recession shows the devastating effects of a severe monetary contraction and how the provision of cash can help to avoid such a situation. Interesting similarities are found in two case studies, one on the demonetization in India and the other on cash supply during various crises in Greece. Our conclusion is that, as there is no perfect substitute for cash due to its unique properties, an efficient payment mix necessarily includes cash. Consequently, it should be the task of central banks to ensure that cash remains in circulation in normal times and is provided in a fully elastic way in times of crisis.