Money demand and equity markets

Money demand in part reflects a portfolio decision. As equities have become a significant store of household wealth, it seems plausible that variations in equity markets could affect money demand. We re-specify a standard money demand equation to include stock market volatility and revisions to analyst earnings projections. We find that these equity market variables are statistically significant and reduce the errors from money demand models.

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Year of publication:	2003
Authors:	Carpenter, Seth B. ; Lange, Joe
Institutions:	Federal Reserve Board (Board of Governors of the Federal Reserve System)
Subject:	Stock exchanges \| Demand for money

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Extent:	text/html application/pdf
Series:	Finance and Economics Discussion Series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 2003-03
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005394011