Benati, Luca; Lucas Jr., Robert E.; Nicolini, Juan Pablo; Weber, Warren (2021). International evidence on long-run money demand. Journal of monetary economics, 117, pp. 43-63. Elsevier 10.1016/j.jmoneco.2020.07.003
![[img]](https://boris.unibe.ch/style/images/fileicons/text.png) |
Text
1-s2.0-S0304393220300866-main.pdf - Published Version Restricted to registered users only Available under License Publisher holds Copyright. Download (3MB) |
A dataset comprising 38 countries and relatively long sample periods, which extend in some cases to over a century, is used to study the behavior of long-run demand for M1. For a large majority of the countries, the evidence supports the existence of a stable long-run relationship between the ratio of M1 to GDP and a short-term interest rate. The log-log specification provides a good characterization of the data, with the exception of periods featuring very low interest rates. An extension of the theory that imposes limits on the amount households can borrow results in a truncated log-log specification, which is in line with what we observe in the data. We estimate the interest rate elasticity to be between 0.3 and 0.6.
Item Type: |
Journal Article (Original Article) |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Benati, Luca |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
ISSN: |
0304-3932 |
Publisher: |
Elsevier |
Language: |
English |
Submitter: |
Dino Collalti |
Date Deposited: |
19 Apr 2021 16:46 |
Last Modified: |
05 Dec 2022 15:49 |
Publisher DOI: |
10.1016/j.jmoneco.2020.07.003 |
BORIS DOI: |
10.48350/154035 |
URI: |
https://boris.unibe.ch/id/eprint/154035 |
Actions (login required)
 |
Edit item |