National culture and the demand for physical money during the first year of the COVID-19 pandemic

Finance Research Letters, Volume 51, January 2023


Nicolaus Copernicus University in Toruń, Poland

Received 22 September 2022, Revised 22 October 2022, Accepted 7 November 2022, Available online 9 November 2022, Version of Record 15 November 2022.


There was a significant increase in the demand for physical money during the COVID-19 pandemic. This stood in stark contrast to the decline in demand witnessed during previous pandemics. However, the change was not uniform and varied significantly between countries. By employing the “national culture” framework to identify the drivers of this variation, this study found that uncertainty avoidance, as well as social norms regarding gratification, played a major role. This suggests that some central banks should hold larger cash reserves to mitigate the risk of uncertainty and that the national culture framework may prove useful in researching the international differences in past, present, and future money demand.