Financial Liberalization, the Wealth Effect, and the Demand for Broad Money in Japan
AbstractThis paper examines the demand for broad money in Japan from 1975 to 1994. In spite of the large shocks resulting from financial liberalization and the subsequent "boom and bust" of the "bubble" economy, the paper confirms that a stage money demand function can still be set up by taking proper account of financial liberalization and the wealth effect, and by adopting an adequate econometric strategy. In addition, a super exogeneity test is conducted, and its implication is considered in the context of the monetary transmission mechanism.
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Bibliographic InfoArticle provided by Institute for Monetary and Economic Studies, Bank of Japan in its journal Monetary and Economic Studies.
Volume (Year): 16 (1998)
Issue (Month): 1 (May)
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Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
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