Effects of movements in equities prices on M2 demand
Large 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 â€œparkâ€ funds in depository assets while they determine the fundsâ€™ 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 M2â€™s recent strength.
Volume (Year): (1999)
Issue (Month): Q IV ()
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- John B. Carlson & Dennis L. Hoffman & Benjamin D. Keen & Robert H. Rasche, 1999.
"Results of a study of the stability of cointegrating relations comprised of broad monetary aggregates,"
9917, Federal Reserve Bank of Cleveland.
- Carlson, John B. & Hoffman, Dennis L. & Keen, Benjamin D. & Rasche, Robert H., 2000. "Results of a study of the stability of cointegrating relations comprised of broad monetary aggregates," Journal of Monetary Economics, Elsevier, vol. 46(2), pages 345-383, October.
- James Dow & Douglas W. Elmendorf, 1998. "The effect of stock prices on the demand for money market mutual funds," Finance and Economics Discussion Series 1998-24, Board of Governors of the Federal Reserve System (U.S.).
- Athanasios Orphanides & Richard D. Porter, 1998.
"P* revisited: money-based inflation forecasts with a changing equilibrium velocity,"
Finance and Economics Discussion Series
1998-26, Board of Governors of the Federal Reserve System (U.S.).
- Orphanides, Athanasios & Porter, Richard D., 2000. "P revisited: money-based inflation forecasts with a changing equilibrium velocity," Journal of Economics and Business, Elsevier, vol. 52(1-2), pages 87-100.
- Sekine, Toshitaka, 1998. "Financial Liberalization, the Wealth Effect, and the Demand for Broad Money in Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 16(1), pages 35-55, May.
- Yash P. Mehra, 1997. "A review of the recent behavior of M2 demand," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 27-44.
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