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Cash is alive… and somewhat young? Decoupling age, period and cohort from euro cash use
This article examines the future demand for cash by analyzing secular trends and age-related behaviors in cash usage indicators. The study uses data from the 2019, 2022, and 2024 Eurosystem surveys on consumer payment attitudes in the euro area. An age-period-cohort-interaction framework is applied to understand patterns in transactional cash use, precautionary cash hoarding, and the perceived importance of cash. The findings reveal significant period effects, including a decline in transactional cash use and an increased importance of having cash as an option. There are also temporary changes, such as a post-pandemic peak in cash hoarding. Age effects significantly shape cash habits, with younger cohorts hoarding more cash and older demographics using cash more in everyday transactions. Middle-aged cohorts use cash less, and cohort analysis reveals distinct attitudes towards cash across different birth cohorts. The study concludes that cash fulfills enduring, albeit evolving, roles across demographic groups, particularly for younger people. The article highlights policy challenges that need to be addressed to foster a resilient and inclusive payment system that accommodates digital innovation alongside cash. Overall, the study provides insights into the complex and multifaceted nature of cash demand.