covering a set of skills which are acquired through education, as well as via on - the - job training and experience. also, human capital is affected by health conditions, on which people ’ s cognitive abilities directly depend. the importance of human capital to economic growth has been demonstrated in a number of empirical analyses. 3 several studies show that more affluent economies are also richer in human capital. for example, there is a clear positive relationship between the average years of schooling and per capita income in advanced economies ( chart 5 ). in addition, a vast literature in the field of labour economics has provided evidence that a positive causal relationship – which is significant and robust – can be found between the years of formal schooling ( at primary, secondary and tertiary level ) and wages. this evidence suggests that private, or so - called “ mincerian ” 4, returns on education are within an average range of 6. 5 % to 9 % ; this means that an additional year of formal schooling is associated with a 7. 5 % increase in wages on average over a working life. 5 chart 6 illustrates the evolution of the wage premium of college graduates and high school graduates in the united states. it shows that those who achieve higher educational levels enjoy substantially higher earnings ; moreover, the wage gap between educated and less educated workers seems to have significantly widened since the early 1980s. the evidence related to the rise in returns on education – together with that on the inequality of earnings – provides useful information on the supply and demand of skills. in particular, these factors would suggest that while the relative demand for more educated workers has steadily increased in line with technological advances, the supply of highly skilled labour has not always kept pace with demand. in other words, the rise in the premium associated with technical skills indicates a mismatch between the insufficient supply of education and growing labour market requirements. this hypothesis – which has recently been put forward the latest data available for italy are for 2006. benhabib, j. and spiegel, m. ( 1994 ), “ the role of human capital in economic development ”, journal of monetary economics. for general surveys of the contribution of human capital and education to economic growth, see krueger and lindahl ( 2001 ) and wasmer et al. ( 2006 ). de la fuente and ciccone ( 2002 ) review the literature with specific reference to europe. the “ mincerian equation ” ( developed by polish - american economist jacob mincer ) specifies a relationship between an

weakened by the headwinds that may arise in the aftermath of balance sheet recessions. likewise, inherent non - linearities could kick in when interest rates are persistently low and may dampen their impact on spending. the law - and - order case for banning cash also wilts under scrutiny. by acting as a store of value and a means of payment, cash fulfills an important social function for many honest citizens. would anyone suggest forbidding cell phones because criminals use them? harming the lawabiding majority in order to punish a misbehaving minority is a step too far. last but not least, cash is the only central bank liability available to the public. digital claims against central banks already exist – commercial banks and some other types of institutions hold them in the form of deposits. but private citizens have no access to them. although electronic payments provided by the financial industry are used by private customers, these methods are based on commercial bank money. from the perspective of the citizen, a liability vis - a - vis the central bank is more valuable than one vis - a - vis a commercial bank, not least because of the different credit risks. bank deposits and other commercial bank liabilities are highly protected, but they are not absolutely risk - free. a central bank, however, can never become illiquid and can always honour its liabilities. cash therefore maintains a tangible link between the general public and the central bank, a tie which is important for maintaining trust between the two. but cash could be digitalised, too, given recent technological advances such as the distributed ledger technology, or dlt, a variant of which is used for bitcoin. central banks could stop issuing cash and shift to just providing an electronic claim on the central bank. in principle, the introduction of central bank - issued digital currency or digital base money ( dbm ), as i have called it, would be much easier and potentially less expensive than ten years ago. 2 / 3 bis central bankers'speeches but the challenges go beyond the technological sphere. would dbm involve each individual having an account at the central bank, or instead a decentralised system where each individual has an electronic wallet and the central bank is unaware of transactions that take place? either solution could be implemented using distributed ledger technologies, but the set - up would be quite different in each scenario. a further important question is whether dbm would be remunerated ( as excess central bank reserves held by commercial banks currently are