IDEAS home Printed from https://ideas.repec.org/p/wop/pennin/97-11.html

Monies and Banking

Author

Listed:
  • Anthony M. Santomero
  • John J. Seater

Abstract

This paper investigates the demand by households for transaction services from the financial sector. Households buy several goods with any of several media of exchange. The households choose the medium of exchange to use for each type of good, how much of each type of medium to hold, and the frequencies of commodity and financial transactions. The variety of financial services demanded by a household depends positively on the household's income, with households at the bottom of the income distribution demanding no financial services at all. Household demand for financial services also depends on how the household allocates its income among the available goods. Households with the same income but different allocations will demand different mixes of financial services. These results have several implications for the organization of the banking market, especially the location of bank branches, and the availability of banking services in different areas.

Suggested Citation

  • Anthony M. Santomero & John J. Seater, 1997. "Monies and Banking," Center for Financial Institutions Working Papers 97-11, Wharton School Center for Financial Institutions, University of Pennsylvania.
    • Handle: RePEc:wop:pennin:97-11
    as

    Download full text from publisher

    File URL: http://fic.wharton.upenn.edu/fic/papers/97/9711.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Santomero, Anthony M, 1974. "A Model of the Demand for Money by Households," Journal of Finance, American Finance Association, vol. 29(1), pages 89-102, March.
    2. Santomero, Anthony M & Seater, John J, 1996. "Alternative Monies and the Demand for Media of Exchange," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 942-960, November.
    3. Arthur B. Kennickell & Martha Starr-McCluer & Annika E. Sunden, 1997. "Family Finance in the U.S.: Recent Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 83(1), pages .1-24, January.
    4. Romer, David, 1987. "The monetary transmission mechanism in a general equilibrium version of the baumol-tobin model," Journal of Monetary Economics, Elsevier, vol. 20(1), pages 105-122, July.
    5. Mizrach, Bruce & Santomero, Anthony M., 1990. "A liquidity-in-advance model of the demand for money under price uncertainty," Journal of Monetary Economics, Elsevier, vol. 26(1), pages 143-159, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Seater, John J., 2008. "The Demand for Currency Substitution," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 2, pages 1-30.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yassine Bouhdaoui & David Bounie, 2012. "Modeling the Share of Cash Payments in the Economy: An Application to France," International Journal of Central Banking, International Journal of Central Banking, vol. 8(4), pages 175-195, December.
    2. Kenneth Carow & Michael Staten, 2002. "Plastic choices: Consumer usage of bank cards versus proprietary credit cards," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 216-232, June.
    3. Jeremy Berkowitz & Richard Hines, 1998. "Bankruptcy exemptions and the market for mortgage loans," Finance and Economics Discussion Series 1998-07, Board of Governors of the Federal Reserve System (U.S.).
    4. Chu, Angus C. & Ji, Lei, 2016. "Monetary Policy And Endogenous Market Structure In A Schumpeterian Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 20(5), pages 1127-1145, July.
    5. Julio J. Rotemberg, 2007. "Minimally altruistic wages and unemployment in a matching model," Working Papers 07-5, Federal Reserve Bank of Boston.
    6. Baxter, Marianne, 2002. "Social Security as a financial asset: gender-specific risks and returns," Journal of Pension Economics and Finance, Cambridge University Press, vol. 1(1), pages 35-52, March.
    7. Bernardino Adao & Andre C. Silva, 2017. "Sub-optimality of the Friedman rule with distorting taxes," Nova SBE Working Paper Series wp623, Universidade Nova de Lisboa, Nova School of Business and Economics.
    8. Tom Krebs & Moritz Kuhn & Mark L. J. Wright, 2015. "Human Capital Risk, Contract Enforcement, and the Macroeconomy," American Economic Review, American Economic Association, vol. 105(11), pages 3223-3272, November.
    9. David Bounie & Abel François, 2006. "Les déterminants de la détention et de l’usage des instruments de paiement : éléments théoriques et empiriques," Revue d'Économie Financière, Programme National Persée, vol. 83(2), pages 159-176.
    10. Catalina Amuedo-Dorantes & Susan Pozo, 2004. "On the Use of Differing Money Transmission Methods by Mexican Immigrants," Economic Working Papers at Centro de Estudios Andaluces E2004/06, Centro de Estudios Andaluces.
    11. Chidambaran G. Iyer, 2025. "Diffusion of Digital Payments in India: A Tale of Two Technologies," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 11(2), pages 309-324, July.
    12. Fabio Panetta & Dario Focarelli, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Italian Market for Bank Deposits," CEIS Research Paper 10, Tor Vergata University, CEIS.
    13. Albanesi, Stefania, 2007. "Inflation and inequality," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1088-1114, May.
    14. Pippow Ingo & Schoder Detlef, 2002. "The Demand for Stored Value Payment Instruments," Microeconomics 0204002, University Library of Munich, Germany.
    15. Seater, John J., 2008. "The Demand for Currency Substitution," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 2, pages 1-30.
    16. Wilko Bolt & Jon Frost & Hyun Song Shin & Peter Wierts, 2024. "The Bank of Amsterdam and the Limits of Fiat Money," Journal of Political Economy, University of Chicago Press, vol. 132(12), pages 3919-3941.
    17. Lisa A. Keister, 2000. "Family Structure, Race, and Wealth Ownership: A Longitudinal Exploration of Wealth Accumulation Processes," Macroeconomics 0004051, University Library of Munich, Germany.
    18. Arthur Kennickell & Annamaria Lusardi, 2004. "Disentangling the Importance of the Precautionary Saving Mode," NBER Working Papers 10888, National Bureau of Economic Research, Inc.
    19. Lisa A. Keister, 2000. "Family Structure, Race, and Wealth Ownership: A Longitudinal Exploration of Wealth Accumulation Processes," Economics Working Paper Archive wp_304, Levy Economics Institute.
    20. Calomiris, Charles W. & Longhofer, Stanley D. & Miles, William, 2013. "The Housing Wealth Effect: The Crucial Roles of Demographics, Wealth Distribution and Wealth Shares," Critical Finance Review, now publishers, vol. 2(1), pages 049-099, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:pennin:97-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/fiupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.