Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101777
Authors: 
Läufer, Nikolaus K. A.
Year of Publication: 
1997
Series/Report no.: 
Diskussionsbeiträge: Serie II, Sonderforschungsbereich 178 "Internationalisierung der Wirtschaft", Universität Konstanz 356
Abstract: 
The current discussion about stability of the European money demand function is flawed by a confusion of two different concepts of stability (adjustment speed versus error variance). The meaning and importance of the underlying notions of stability is clarified. It is demonstrated that necessary and sufficient conditions for the two types of stability are mutually independent and empirical issues. The issues are related to a distinction between a currency substitution effect and a portfolio diversification effect. The difference can also be related to the choice between discretionary and rule-oriented monetary policies.
Subjects: 
European Money Demand
Stability
Monetary Policy
JEL: 
E41
E52
Document Type: 
Working Paper

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