The Long-Run Demand for M2 Reconsidered

Altermatt, Sophie (March 2018). The Long-Run Demand for M2 Reconsidered (Discussion Papers 18-24). Bern: Department of Economics

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This paper reconsiders the long-run demand for M2 based on a newly constructed dataset featuring 32 countries since the first half of the 19th century. The evidence from cointegration tests suggests that a long-run equilibrium relationship for M2 demand is hardly present. Specifically, only for five countries (Finland, Korea, Mexico, Paraguay and Taiwan) cointegration tests produce strong evidence in favor of a stable long-run money demand. Evidence for Israel
and Lebanon is weaker, but still points towards a stable long-run demand for M2. For all other countries evidence speaks against a stable money demand or it is mixed across money demand specifications and/or type of cointegration test.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Altermatt, Sophie Julia

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

03 Sep 2020 08:34

Last Modified:

03 Sep 2020 08:34

JEL Classification:

E4, E41

BORIS DOI:

10.7892/boris.145878

URI:

https://boris.unibe.ch/id/eprint/145878

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