Is the Price Elasticity of Money Demand Always Unity?

Including both monetary gold and nonmonetary gold in a standard money-in-utility model, we establish a presumption that the price elasticity of money demand should be less than one under commodity standards. Applying cointegration methods to data of the world, the United Kingdom, and the United States, we find support for the new theory.

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Year of publication:	2005
Authors:	Evans, Paul ; Wang, Xiaojun
Institutions:	Department of Economics, University of Hawaii-Manoa
Subject:	money demand \| price homogeneity \| commodity standard

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 200508 11 pages
Classification:	E41 - Demand for Money ; E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005824180