LIMITED COMMITMENT AND THE DEMAND FOR MONEY

• 成果类型: Article
• 署名作者: Berentsen, Aleksander; Huber, Samuel; Marchesiani, Alessandro
• 署名单位: University of Basel; Federal Reserve System - USA; Federal Reserve Bank - St. Louis; University of Liverpool
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12449
• 发表日期: 2018
• 页码: 1128-1156
• 关键词: welfare cost; transactions demand; theoretic approach; inflation; search; prices; liquidity; exchange; finance; POLICY

摘要

Understanding money demand is important for our comprehension of macroeconomics and monetary policy. Its instability has made this a challenge. Common explications for the instability are financial regulations and financial innovations that shift the money demand function. We provide a complementary view by showing that a model where borrowers have limited commitment can significantly improve the fit between the theoretical money demand function and the data. Limited commitment can also explain why the ratio of credit to M1 is currently so low, despite that nominal interest rates are at their lowest recorded levels.