Inverse Demand Systems for Composite Liquid Assets: Evidence from China
AbstractThis paper applies the concept of inverse demands and its related scale and substitution effects to model the demand for liquid assets in China. We also propose a new model, termed the Modified Almost Ideal Inverse Demand System (MAIIDS), which nests the Almost Ideal Inverse Demand System (AIIDS) as a special case. We estimate this new model and its special case by using Chinese panel data and find it statistically superior to the AIIDS. Results also reveal the improved regularity features of the MAIIDS, and show that demand patterns of liquid assets across different income groups in China are distinctive.
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Bibliographic InfoPaper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 097.
Date of creation: 20 Sep 2001
Date of revision:
AIIDS; MAIIDS; Regularity; Liquid assets.;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
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