Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/88210 
Year of Publication: 
2010
Series/Report no.: 
ROME Discussion Paper Series No. 10-09
Publisher: 
Research On Money in the Economy (ROME), s.l.
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
Document Type: 
Working Paper

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