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EU-wide money and currency substitution

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  • Miguel Lebre de Freitas

    (Departamento de Economia e Gestão Industrial, Universidade de Aveiro)

Abstract

This paper re-addresses the issue of international currency substitution, estimating a money demand equation for the euro-area. The testing procedure accounts for two alternative theories of money demand—the liquidity services model and the portfolio-balance model. The evidence found is favorable to the CS hypothesis in general and to the liquidity services model of money demand in particular. This result, somehow expected, challenges some recent literature on Euro-Area money demand that has been exclusively devoted to the closed economy portfolio-balance model.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Miguel Lebre de Freitas, 2003. "EU-wide money and currency substitution," Working Papers de Economia (Economics Working Papers) 09, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
    • Handle: RePEc:ave:wpaper:092003
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    References listed on IDEAS

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    More about this item

    Keywords

    International currencies; Currency substitution; EMU; money demand;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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