Effects of movements in equities prices on M2 demand
AbstractLarge swings in stock prices are sometimes associated with a redirection of household savings flows. Such changes can lead to transitory increases in M2 as investors temporarily “park” funds in depository assets while they determine the funds’ ultimate destination. The authors find that, although stock price changes are statistically significant as an explanation for M2 growth, they do not account for much of M2’s recent strength.
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Bibliographic InfoArticle provided by Federal Reserve Bank of Cleveland in its journal Economic Review.
Volume (Year): (1999)
Issue (Month): Q IV ()
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9917, Federal Reserve Bank of Cleveland.
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- David Cook & Woon Gyu Choi, 2007. "Financial Market Risk and U.S. Money Demand," IMF Working Papers 07/89, International Monetary Fund.
- Cronin, David, 2014. "The interaction between money and asset markets: A spillover index approach," Journal of Macroeconomics, Elsevier, Elsevier, vol. 39(PA), pages 185-202.
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