On the stability of money demand
In this paper we consider a simple model of transactional assets management to evaluate the changes in banking regulation that passed between 1980 and 1982. The model implies that the newly created deposits in the US after the deregulation should be taken into account in the proper definition of money, in a way the model itself makes explicit. We show that once this is taken into account, the money demand equation characterized by Meltzer (1960) and Lucas (2000) remained remarkably stable.
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- Allan H. Meltzer, 1963. "The Demand for Money: The Evidence from the Time Series," Journal of Political Economy, University of Chicago Press, vol. 71, pages 219.
- Alvarez, Fernando & Lippi, Francesco, 2007.
"Financial Innovation and the Transactions Demand for Cash,"
CEPR Discussion Papers
6472, C.E.P.R. Discussion Papers.
- Fernando Alvarez & Francesco Lippi, 2009. "Financial Innovation and the Transactions Demand for Cash," Econometrica, Econometric Society, vol. 77(2), pages 363-402, 03.
- Fernando E. Alvarez & Francesco Lippi, 2007. "Financial Innovation and the Transactions Demand for Cash," NBER Working Papers 13416, National Bureau of Economic Research, Inc.
- Fernando Alvarez & Francesco Lippi, 2007. "Financial Innovation and the Transactions Demand for Cash," EIEF Working Papers Series 0807, Einaudi Institute for Economics and Finance (EIEF), revised Sep 2007.
- Peter N. Ireland, 2008.
"On the Welfare Cost of Inflation and the Recent Behavior of Money Demand,"
NBER Working Papers
14098, National Bureau of Economic Research, Inc.
- Peter N. Ireland, 2009. "On the Welfare Cost of Inflation and the Recent Behavior of Money Demand," American Economic Review, American Economic Association, vol. 99(3), pages 1040-52, June.
- Peter N. Ireland, 2007. "On the Welfare Cost of Inflation and the Recent Behavior of Money Demand," Boston College Working Papers in Economics 662, Boston College Department of Economics.
- Samuel Reynard, 2004.
"Financial Market Participation and the Apparent Instability of Money Demand,"
2004-01, Swiss National Bank.
- Reynard, Samuel, 2004. "Financial market participation and the apparent instability of money demand," Journal of Monetary Economics, Elsevier, vol. 51(6), pages 1297-1317, September.
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