A Stable Model for Euro Area Money Demand: Revisiting the Role of Wealth

In this paper we present an empirically stable money demand model for Euro area M3. We show that housing wealth is an important explanatory variable of long-run money demand that captures the trending behaviour of M3 velocity, in particular its shift in the first half of this decade. We show that the current financial crisis has no impact on the stability of our money demand model. JEL Classification: C22, C32, E41

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Year of publication:	2009-11
Authors:	Beyer, Andreas
Institutions:	European Central Bank
Subject:	cointegration \| Money demand \| Parameter Constancy \| Vector Error Correction Model \| wealth

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 1111
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008558668