In recent decades, the United States has not only experienced great economic changes in the financial markets but also undergone tremendous social and demographic transformations. Based on the life-cycle theory of consumption and saving, Keynes’s concept of marginal propensity to save, and...

This study examines the empirical contents of precautionary demand for transactions money balances. Panel data are utilized to construct estimates of income variance. Regression results indicate that income uncertainty has a positive effect on precautionary money demand, but the magnitude of the...

One of the tenets of the buffer stock model of money demand is that transactions money balances are shock absorbers and transitory money balances would dissipate in the long run as actual money demand adjusts to its desired level following an unanticipated income shock. However, poor performance...

This study takes a closer look at the relationship between money demand and the life-cycle motive using panel data from the Survey of Income and Program Participation. Findings indicate that the life-cycle motive exerts a direct impact on household demand for interest-earning monetary assets,...

This study takes a closer look at the relationship between money demand and the life-cycle motive using panel data from the Survey of Income and Program Participation. Findings indicate that the life-cycle motive exerts a direct impact on household demand for interest-earning monetary assets,...