Euro area money demand and international portfolio allocation: A contribution to assessing risks to price stability

This paper argues that a stable broad money demand for the euro area over the period 1980–2011 can be obtained by modelling cross border international portfolio allocation. As a consequence, model-based excess liquidity measures, namely the difference between actual M3 growth (net of the inflation objective) and the expected money demand trend dynamics, can be useful to predict HICP inflation.

MoreLess

Year of publication:	2013
Authors:	Santis, Roberto A. De ; Favero, Carlo A. ; Roffia, Barbara
Published in:	Journal of International Money and Finance. - Elsevier, ISSN 0261-5606. - Vol. 32.2013, C, p. 377-404
Publisher:	Elsevier
Subject:	Euro area money demand \| Inflation forecasts \| Monetary policy \| Portfolio allocation

More details

Type of publication:	Article
Classification:	E41 - Demand for Money ; E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; G11 - Portfolio Choice ; G15 - International Financial Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010594685