This paper examines whether the existence and the timing of real balance effects contribute to the determination of the absolute price level, as suggested byPatinkin (1949,1965), and if they affect conditions for local equilibrium uniqueness and stability. I show that there exists a unique price...

This paper examines how money demand induced real balance effects contribute to the determination of the price level, as suggested by Patinkin (1949,1965), and if they affect conditions for local equilibrium uniqueness and stability. There exists a unique price level sequence that is consistent...

During the turbulent 1970s and 1980s the Bundesbank established an outstandingreputation in the world of central banking. Germany achieved a high degree of domesticstability and provided safe haven for investors in times of turmoil in the internationalfinancial system. Eventually the Bundesbank...

This study presents empirical evidence on the long-run motives for holding euro area money by focusing on the role of equity and labour markets. Equity positively affects money demand through wealth effects, as equities are a significant store of household wealth and thus part of a financial...

This paper analyzes the recently documented instability of money demand in theeuro area in the framework of a Markov switching trend model. First, we consider astandard flexible price model with stable money demand, rational expectations, andan exogenous income-money ratio which follows a Markov...

By applying a structural demand model to unique consumer-level survey data from the euro area, we assess how different CBDC design options, combined with individual (revealed) preferences, influence the potential demand for a digital euro. Estimating the demand for a digital euro, we find that...

In this study, the author demonstrates that the selection of an appropriate money-demand function is crucial to ascertain the relationship between fiscal deficits and inflation. To do so, the author incorporates a Selden-Latané money-demand function into a micro-founded extension of the model...

This policy brief investigates Sierra Leone's interest rate volatility, a recurring concern due to its economic instability. Using the ARDL model and bolstered by the stability exhibited in CUSUM and CUSUM square tests, we explore the impact of deposit and lending interest rates on money demand....

This paper seeks to determine the existence of a stable demand for money relation for the case of Madagascar. We use an Engle-Granger error correction model to be able to demonstrate that in the long-run, the demand for money is negatively explained by the opportunity cost and positively by real...

This paper aims at examining the declining inflation rate, the shape of the Laffer curve, welfare and Seignorage-optimizing inflation rate in a small open economy with flexible prices and exchange rate, under currency substitution. The model shows that, in the steady state, the equilibrium...