Households’ Portfolio Structure in Germany - Analysis of Financial Accounts Data 1959-2009

Based on a Financial Almost Ideal Demand System (FAIDS), this paper investigates the wealth structure of German households. The long-run wealth elasticities and interest-rate elasticities were calculated using a unique new financial accounts macro-data set which covers the period from 1959 to 2009 and contains a portfolio of eight different financial assets. We found that portfolio shifts in the long run are mainly determined by changes in interest rates. Furthermore, the estimated model provides evidence that currency (and transferable deposits) is mainly a substitute for other assets and that time deposits are typically a complement