RBA economist proposes ‘survival model’ of banknote life
Model is more complex, but produces less volatile, more nuanced estimates
A researcher at the Reserve Bank of Australia (RBA) proposes a new method of estimating the lifetime of a banknote in a research discussion paper published today (September 3).
In The Life of Australian Banknotes, author Alexandra Rush proposes the "survival model" as an improvement on simpler models based on the turnover of banknotes. While the latter are strongly affected by shocks to banknote demand or new issuances, the survival model can take these factors into account.
The survival
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