Why Has Broad Money Demand Been More Stable in the Euro Area than in Other Economies? A Literature Review
29 Pages Posted: 26 Jan 2004
Date Written: September 2003
Abstract
Based on a literature review, this paper investigates the reasons why broad money demand has usually been found to be more stable in the euro area than in other large economies. The paper concludes that there are three main explanations for this fact. First, in some countries outside the euro area the sources of instabilities in money demand were country-specific. Second, financial innovation appears to have had a weaker impact on money demand in the euro area than in other economies. A third explanation is that there are gains in terms of stability in aggregating the money demand of the individual euro area countries.
Keywords: Money demand, financial innovation, aggregation, euro area
JEL Classification: E41, C22, C32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Future of Monetary Aggregates in Monetary Policy Analysis
-
Global Monetary Policy Shocks in the G5: A Svar Approach
By Joao Miguel Sousa and Andrea Zaghini
-
Putting 'M' Back in Monetary Policy
By Eric M. Leeper and Jennifer E. Roush
-
Putting 'M' Back in Monetary Policy
By Eric M. Leeper and Jennifer E. Roush
-
A Money Demand System for Euro Area M3
By Claus Brand and Nuno Cassola