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The conditions under which European monetary policy is likely to be conducted are investigated by means of multi-variate time series modelling using aggregated data of all eleven European Monetary Union member states. A cointegration analysis identifies two stable long-run relationships, one of...
Persistent link: https://www.econbiz.de/10011432808
Recent empirical studies have found evidence of unstable long run money demand functions if recent data are used. If the link between money balances and the macroeconomy is fragile, the rationale of monetary aggregates in the ECB strategy has to be doubted. In contrast we present a "stable''...
Persistent link: https://www.econbiz.de/10011518878
Money growth in the euro area has exceeded its target since 2001. Likewise, recent empirical studies did not find …, a rise in the income elasticity after 2001 is taken into account. The break might be linked to the introduction of euro … coins and banknotes. The monetary overhang and the real money gap do not indicate significant inflation pressures. The …
Persistent link: https://www.econbiz.de/10011384239
This paper examines the relevance of the Lucas critique for euro area money demand. Based on the money in the utility … results show that the Lucas critique can be refuted in case of euro area money demand for the period of quantitative easing …
Persistent link: https://www.econbiz.de/10011659976
This paper analyzes the recently documented instability of money demand in the euro area in the framework of a Markov … dynamics is estimated with Bayesian methods for euro area data from 1975-2003. This exercise provides support for our model and … a stable demand for M3 in the euro area. …
Persistent link: https://www.econbiz.de/10011570250
In this paper we examine why monetary aggregates of euro area Member States have developed differently since the … inception of the euro. We derive a money demand equation that incorporates housing wealth and collateral as well as substitution …
Persistent link: https://www.econbiz.de/10010208778
-time experiment shows that real M1 can improve output gap estimates for euro area data. For many periods the cyclical component of …
Persistent link: https://www.econbiz.de/10010248220
Persistent link: https://www.econbiz.de/10000684217
This study presents empirical evidence on the long-run motives for holding euro area money by focusing on the role of … shorter sample period starting in 1994. -- Euro area money demand ; wealth ; equity return ; precautionary motive …
Persistent link: https://www.econbiz.de/10003963754
In this paper we present an empirically stable money demand model for Euro area M3. We show that housing wealth is an …
Persistent link: https://www.econbiz.de/10003963820