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ZEI Working Papers, Zentrum für Europäische Integrationsforschung, Universität Bonn >
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http://hdl.handle.net/10419/39578
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| Title: | | The demand for money in Austria  |
| Authors: | | Hayo, Bernd |
| Issue Date: | | 2000 |
| Series/Report no.: | | ZEI working paper B 06-2000 |
| Abstract: | | In this paper, the demand for real money M1, M2, and M3 is estimated for Austria. The modelling takes place within the framework of a small vector autoregression. To estimate the demand for money, two-equation error-correction models are constructed, which contain the short-run dynamics and the long-run economic equilibrium. It is found that a stable money demand exists for all monetary aggregates. The long-run equilibrium of M1, after accounting for a structural break in 1979, can be characterised as a classical type of money demand, with no interest rate effects and a unity elasticity of real GDP. In the case of M2 and M3, we find a unit coefficient on income and a significantly negative influence of a long-term interest rate. The statistical properties of the estimated short-run money demand equations – considering insample and out-of-sample (35 observations) tests – are generally very good. |
| Subjects: | | monetary economics money demand Austria |
| JEL: | | E41 C32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | ZEI Working Papers, Zentrum für Europäische Integrationsforschung, Universität Bonn
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