Euro area money demand and international portfolio allocation: A contribution to assessing risks to price stability

This paper argues that a stable broad money demand for the euro area over the period 1980–2011 can be obtained by modelling cross border international portfolio allocation. As a consequence, model-based excess liquidity measures, namely the difference between actual M3 growth (net of the inflation objective) and the expected money demand trend dynamics, can be useful to predict HICP inflation.

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Year of publication:	2013
Authors:	Santis, Roberto A. De ; Favero, Carlo A. ; Roffia, Barbara
Published in:	Journal of International Money and Finance. - Elsevier, ISSN 0261-5606. - Vol. 32.2013, C, p. 377-404
Publisher:	Elsevier
Subject:	Euro area money demand \| Inflation forecasts \| Monetary policy \| Portfolio allocation

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Type of publication:	Article
Classification:	E41 - Demand for Money ; E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; G11 - Portfolio Choice ; G15 - International Financial Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010594685