Estimating a European Demand for Money

Bernd Hayo

Macroeconomics from University Library of Munich, Germany

Abstract: European Monetary Union will come into existence in 1999. This raises questions related to the monetary policy targets that will be adopted by the European Central Bank (ECB). For both likely candidates, targeting a money aggregate or an inflation target, the existence of a stable money demand function at a European level is important. In this paper estimates of such a European money demand for narrow and broad money for the actual 11 EMU countries based on quarterly aggregate data from 1964 to 1994 are presented. It is argued that statistically satisfactory and economically interpretable functions can be found. The robustness of the results is further evaluated using alternative country groups. Moreover, the estimated models appear to be stable over a period of 20 quarters. This raises the hopes that the ECB will face a stable money demand and be able - at least for a certain time - to use past aggregate data for policy purposes.

Keywords: European Money Demand; European Monetary Union; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E41 E47 E52 F33 (search for similar items in EconPapers)
Pages: 32 pages
Date: 1998-11-26
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-mon
Note: Type of Document - PDF-file; prepared on IBM PC ; pages: 32; figures: included
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/9811/9811008.pdf (application/pdf)

Related works:
Journal Article: Estimating A European Demand For Money (1999)
Working Paper: Estimating a European demand for money (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:9811008

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().