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http://hdl.handle.net/10419/47056
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| Title: | | A cointegration analysis of a money demand system in Europe  |
| Authors: | | Gottschalk, Jan |
| Issue Date: | | 1999 |
| Series/Report no.: | | Kiel Working Papers 902 |
| Abstract: | | This paper presents a multivariate analysis of a money demand system in Europe. The system comprises real broad money, real GDP, the inflation rate, a long-term and a short-term interest rate. Two stable cointegration vectors can be identified: a money demand function and a long-run Fisher equation. Inflation does not play a role in the specification of the European money demand function. Stability of money demand is generally seen as a precondition for monetary targeting. No suggestive evidence for structural instability is found for long-run money demand. This is of particular relevance for the monetary strategy of the ECB. |
| Subjects: | | Money Demand in Europe European Monetary Union |
| JEL: | | E41 E52 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Kieler Arbeitspapiere, IfW
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