Factors Determining the Cash Demand Patterns in the Eurozone and Hungary

• In the last two decades an increasingly decisive precautionary demand for cash can be observed in the Eurozone and in Hungary, while the transactional factor became even less important.
• Besides the variables of the traditional theory, the uncertainty, changes in institutional environment and non-rational behaviour are determining cash holding ratios.
• Since the Covid-19 pandemic, the cash holding ratios have been burdened with structural breaks.
• The development of cash holding ratios in the last two decades, the factors affecting them, their relationship, and the structural breaks.