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.

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Year of publication:	2012-05
Authors:	Santis, Roberto A De ; Favero, Carlo A. ; Roffia, Barbara
Institutions:	C.E.P.R. Discussion Papers
Subject:	Euro area money demand \| inflation forecasts \| monetary policy \| portfolio allocation

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 8957
Classification:	E4 - Money and Interest Rates ; E44 - Financial Markets and the Macroeconomy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011083938