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J. Risk Financial Manag. 2019, 12(1), 13; https://doi.org/10.3390/jrfm12010013

Cash Use of the Taiwan Dollar: Is It Efficient?

Econometric Institute, Erasmus School of Economics, P.O. Box 1738, NL3000 DR Rotterdam, The Netherlands
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Author to whom correspondence should be addressed.
The idea of this paper came up with the first author when he visited Taiwan in June 2018 and noticed that banknotes of 200 and 2000 NT$ did not seem to exist, while they do.
As of June 2018, Honorary Chair Professor, Asia University, Taichung, Taiwan.
Received: 21 November 2018 / Revised: 8 January 2019 / Accepted: 12 January 2019 / Published: 15 January 2019
(This article belongs to the Special Issue Applied Econometrics)
Full-Text   |   PDF [269 KB, uploaded 15 January 2019]

Abstract

Two banknotes and two coins of the New Taiwan Dollar are infrequently (if at all) used in Taiwan when people make cash payments. This note examines the effect of this behavior on the efficiency of cash payments. The results are compared with the Euro, where the two highest and two lowest tokens are also rarely used. We find for Taiwan that inefficiency increases with 60.7%, while for the Euro it is only 25.3%. The main reason is that two of the rarely used coins and notes in Taiwan are in the middle of the denominational range, whereas for the Euro, these tokens concern the ends of that range. View Full-Text
Keywords: cash payments; efficiency; denomination range; JEL Classification; E42; E58 cash payments; efficiency; denomination range; JEL Classification; E42; E58
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Franses, P.H.; Welz, M. Cash Use of the Taiwan Dollar: Is It Efficient? . J. Risk Financial Manag. 2019, 12, 13.

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