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The Demand for Money, Financial Innovation, and the Welfare Cost of Inflation : an Analysis with Household Data

Attanasio, Orazio P.; Guiso, Luigi; Jappelli, Tuillo - 2021

How far can shoe-leather go in explaining the welfare cost of inflation? Using a unique set of microeconomic data on … welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconomic framework. The welfare cost of … inflation varies considerably within the population, but never turns out to be very large (about 0.1 percent of consumption or …

Persistent link: https://www.econbiz.de/10013220397

Price Expectations, Foreign Exchange and Interest Rates, and Demand for Money in an Open Economy

Arango, Sebastian; Nadiri, Mohammed Ishaq - 2021

Traditional studies on demand for money have often ignored influence of foreign monetary developments. The literature on international capital mobility, on the other hand, focuses on the impact of adjustments in international reserves on domestic money supply with the implicit assumption that...

Persistent link: https://www.econbiz.de/10013221990

Exchange Rate Determination and the Demand for Money

Hakkio, Craig S. - 2021

This paper examines the conventional monetary equation of exchange rate determination. Under certain exogeneity conditions, one can write the price level, at home and abroad, as the ratio of the nominal money supply to the demand for real money balances. Then, since the exchange rate is the...

Persistent link: https://www.econbiz.de/10013248579

Why Has the Euro Been Falling? An Investigation into the Determinants of the Exchange Rate

Sinn, Hans-Werner; Westermann, Frank - 2021

This paper reconsiders the determinants of the exchange rate by studying the historical episode after the fall of the Iron Curtain. Testing a modified portfolio balance model, we attribute the strength of the deutschmark in the early nineties and the puzzling decline of the euro during its...

Persistent link: https://www.econbiz.de/10013230968

On the Welfare Cost of Inflation and the Recent Behavior of Money Demand

Ireland, Peter N. - 2010

low but still positive rates of inflation, provides an adequate approximation in welfare terms to the alternative of …

Persistent link: https://www.econbiz.de/10012759202

Inflation and Unemployment in the Long Run

Berentsen, Aleksander - 2010

We study the long-run relation between money, measured by inflation or interest rates, and unemployment. We first …

Persistent link: https://www.econbiz.de/10012759405

Short-Run Money Demand

Ball, Laurence M. - 2021

The paper estimates a long-run demand function for M1, using U.S. data for 1959-1993. This paper interprets deviations from this long-run relation with Goldfeld's partial adjustment model. A key innovation is the choice of the interest rate in the money demand function. Most previous work uses a...

Persistent link: https://www.econbiz.de/10013236795

Persistent Liquidity Effects and Long Run Money Demand

Alvarez, Fernando - 2011

We present a monetary model in the presence of segmented asset markets that implies a persistent fall in interest rates after a once and for all increase in liquidity. The gradual propagation mechanism produced by our model is novel in the literature. We provide an analytical characterization of...

Persistent link: https://www.econbiz.de/10013118840

International Evidence on Long Run Money Demand

Benati, Luca - 2016

War I, and for high-inflation countries such as Israel. For low-inflation countries the data often prefer the …

Persistent link: https://www.econbiz.de/10012985954

Sticky Prices Versus Monetary Frictions : An Estimation of Policy Trade-Offs

Aruoba, S. Borağan - 2010

its money demand properties and determine the optimal long-run inflation rate that trades off the New Keynesian distortion …

Persistent link: https://www.econbiz.de/10012757582