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dc.contributor.authorDreger, Christianen_US
dc.contributor.authorWolters, Jürgenen_US
dc.date.accessioned2008-07-09en_US
dc.date.accessioned2009-08-06T13:20:05Z-
dc.date.available2009-08-06T13:20:05Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/27319-
dc.description.abstractMoney growth in the euro area has exceeded its target since 2001. Likewise, recent empirical studies did not find evidence in favour of a stable long run money demand function. The equation appears to be increasingly unstable if more 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 to the bulk of the literature, we are able to identify a stable long run money demand relationship for M3 with reasonable long run behaviour. This finding is robust for different (ML and S2S) estimation methods. To obtain the result, the short run homogeneity restriction between money and prices is relaxed. In addition, 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 corresponding error correction model survives a battery of specification tests.en_US
dc.language.isoengen_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDiscussion papers // German Institute for Economic Research 795en_US
dc.rights.accessrightsinfo:eu-repo/semantics/openAccess-
dc.subject.jelC22en_US
dc.subject.jelC52en_US
dc.subject.jelE41en_US
dc.subject.ddc330en_US
dc.subject.keywordCointegration analysisen_US
dc.subject.keyworderror correctionen_US
dc.subject.keywordexcess liquidityen_US
dc.subject.keywordmoney demand, monetary policyen_US
dc.subject.stwGeldnachfrageen_US
dc.subject.stwGeldmengeen_US
dc.subject.stwGesamtwirtschaftliche Liquiditäten_US
dc.subject.stwSchätzungen_US
dc.subject.stwEU-Staatenen_US
dc.titleM3 money demand and excess liquidity in the euro areaen_US
dc.typeWorking Paperen_US
dc.identifier.ppn571537138en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.relation.projectidinfo:eu-repo/grantAgreement/EC/FP7/217266-
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