Financial market participation and the apparent instability of money demand

• 成果类型: Article
• 署名作者: Reynard, S
• 署名单位: Swiss National Bank (SNB)
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2003.10.005
• 发表日期: 2004
• 页码: 1297-1317
• 关键词: Money demand; Financial market participation; cross-sections

摘要

This paper uses multi-period cross-sectional data on financial assets holdings to shed light on the postwar stability of money demand in the United States. I first present a new measure of the evolution of financial market participation, by relating participation to the extensive margins of money demand, and quantify the influence of wealth on participation decisions. I then relate the increase in participation to the period of missing money and to the subsequent higher interest rate elasticity of monetary aggregates. The paper indicates that time-series estimations of money demand relationships are inherently flawed and tend to inappropriately suggest instability. (C) 2004 Elsevier B.V. All rights reserved.