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Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank >
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http://hdl.handle.net/10419/32455
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| Title: | | Heterogeneity in money holdings across euro area countries: The role of housing  |
| Authors: | | Setzer, Ralph van den Noord, Paul Wolff, Guntram B. |
| Issue Date: | | 2010 |
| Series/Report no.: | | Discussion Paper Series 1: Economic Studies 2010,04 |
| Abstract: | | 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 effects on real money holdings. Empirically, we show that cross-country differences in real balances are determined not only by income differences, a standard determinant of money demand, but also by house price developments. Higher house prices and higher user costs of housing are both associated with larger money holdings. Country-specific money holdings are also connected with structural features of the housing market. |
| Subjects: | | Money housing national contribution euro area |
| JEL: | | E41 E51 E52 |
| ISBN: | | 978-3-86558-601-8 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank
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