Forward-Looking, Stochastic Cash Management and the Demand for Money
AbstractThis paper aims to connect money demand theory with optimal inventory theory and with time series evidence. An agent's problem of minimizing cash-management costs is of a familiar threshold form. Closed-form expressions are derived in a special case. The theory implies that expected future interest rates may influence money holdings despite the absence of strictly convex adjustment cots. A distributed-lag expression for these holdings is proposed in which the adjustment and expectations dynamics are derived from theory.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 673.
Length: 35 pages
Date of creation: 1986
Date of revision:
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Babcock).
If references are entirely missing, you can add them using this form.