The (In)stability of Money Demand in the Euro Area: Lessons from a Cross-Country Analysis
The instability of standard money demand functions has undermined the role of monetary aggregates for monetary policy analysis in the euro area. This paper uses country-specific monetary aggregates to shed more light on the economics behind the instability of euro area money demand. Our results obtained from panel estimation indicate that the observed instability of standard money demand functions could be explained by omitted variables like e.g. technological progress that are important for money demand but constant across member countries.
|Date of creation:||Apr 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Spandauer Str. 1,10178 Berlin|
Web page: http://sfb649.wiwi.hu-berlin.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gunter Coenen & Juan Luis Vega, 2000.
"The Demand for M3 in the Euro Area,"
Econometric Society World Congress 2000 Contributed Papers
0976, Econometric Society.
- David Hendry & Jurgen Doornik, 2000.
"Constructing Historical Euro-Zone Data,"
Economics Series Working Papers
4, University of Oxford, Department of Economics.
- J. Wolters & T. Teräsvirta & H. Lütkepohl, 1996.
"Modelling the Demand for M3 in the Unified Germany,"
SFB 373 Discussion Papers
1996,24, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Wolters, Jürgen & Teräsvirta, Timo & Lütkepohl, Helmut, 1996. "Modelling the Demand for M3 in the unified Germany," SSE/EFI Working Paper Series in Economics and Finance 113, Stockholm School of Economics.
- Christian Dreger & Jürgen Wolters, 2009.
"Money velocity and asset prices in the euro area,"
Springer, vol. 36(1), pages 51-63, February.
- Christian Dreger & Jürgen Wolters, 2008. "Money Velocity and Asset Prices in the Euro Area," Working Paper / FINESS 7.1b, DIW Berlin, German Institute for Economic Research.
- Christian Dreger & Jürgen Wolters, 2008. "Money Velocity and Asset Prices in the Euro Area," Discussion Papers of DIW Berlin 813, DIW Berlin, German Institute for Economic Research.
- Joakim Westerlund, 2005.
"New Simple Tests for Panel Cointegration,"
Taylor & Francis Journals, vol. 24(3), pages 297-316.
- Lars E.O. Svensson & Stefan Gerlach, 2001.
"Money and inflation in the Euro Area: A case for monetary indicators?,"
BIS Working Papers
98, Bank for International Settlements.
- Gerlach, Stefan & Svensson, Lars E. O., 2003. "Money and inflation in the euro area: A case for monetary indicators?," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1649-1672, November.
- Gerlach, Stefan & Svensson, Lars E O, 2002. "Money and Inflation in the Euro-Area: A Case for Monetary Indicators?," CEPR Discussion Papers 3392, C.E.P.R. Discussion Papers.
- Stefan Gerlach & Lars E.O. Svensson, 2000. "Money and Inflation in the Euro Area: A Case for Monetary Indicators?," NBER Working Papers 8025, National Bureau of Economic Research, Inc.
- Carstensen, Kai, 2006.
"Stock market downswing and the stability of European monetary union money demand,"
Munich Reprints in Economics
19940, University of Munich, Department of Economics.
- Carstensen, Kai, 2006. "Stock Market Downswing and the Stability of European Monetary Union Money Demand," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 395-402, October.
- Laurence Boone & Paul Noord, 2008. "Wealth effects on money demand in the euro area," Empirical Economics, Springer, vol. 34(3), pages 525-536, June.
- Cappiello, Lorenzo & Kadareja, Arjan & Kok, Christoffer & Protopapa, Marco, 2010. "Do bank loans and credit standards have an effect on output? A panel approach for the euro area," Working Paper Series 1150, European Central Bank.
- Ralph Setzer & Guntram Wolff, 2013.
"Money demand in the euro area: new insights from disaggregated data,"
International Economics and Economic Policy,
Springer, vol. 10(2), pages 297-315, June.
- Setzer, Ralph & Wolff, Guntram B., 2009. "Money demand in the euro area: new insights from disaggregated data," MPRA Paper 17483, University Library of Munich, Germany.
- Ralph Setzer & Guntram B. Wolff, 2009. "Money demand in the euro area: new insights from disaggregated data," European Economy - Economic Papers 2008 - 2015 373, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Michael Funke, 2001.
"Money Demand in Euroland,"
Quantitative Macroeconomics Working Papers
20112, Hamburg University, Department of Economics.
- Casey B. Mulligan & Xavier Sala-I-Martin, 1992.
"U.S. Money Demand: Surprising Cross-Sectional Estimates,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 23(2), pages 285-343.
- Sala-i-Martin, X. & Mulligan, C.B., 1992. "U.S. Money Demand: Surprising Cross-Sectional Estimates," Papers 671, Yale - Economic Growth Center.
- Dreger, Christian & Wolters, Jürgen, 2010. "Investigating M3 money demand in the euro area," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 111-122, February.
- Claus Brand & Nuno Cassola, 2004. "A money demand system for euro area M3," Applied Economics, Taylor & Francis Journals, vol. 36(8), pages 817-838.
- Ivo Arnold, 1994. "The myth of a stable European money demand," Open Economies Review, Springer, vol. 5(3), pages 249-259, July.
- Beyer, Andreas, 2009. "A Stable Model for Euro Area Money Demand: Revisiting the Role of Wealth," Working Paper Series 1111, European Central Bank.
- Lemke, Wolfgang & Greiber, Claus, 2005. "Money demand and macroeconomic uncertainty," Discussion Paper Series 1: Economic Studies 2005,26, Deutsche Bundesbank, Research Centre.
- Driscoll, John C., 2004.
"Does bank lending affect output? Evidence from the U.S. states,"
Journal of Monetary Economics,
Elsevier, vol. 51(3), pages 451-471, April.
- John C. Driscoll, 2003. "Does bank lending affect output? evidence from the U.S. states," Finance and Economics Discussion Series 2003-31, Board of Governors of the Federal Reserve System (U.S.).
When requesting a correction, please mention this item's handle: RePEc:hum:wpaper:sfb649dp2010-023. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RDC-Team)
If references are entirely missing, you can add them using this form.