Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144568
Authors: 
Dreger, Christian
Wolters, Jürgen
Year of Publication: 
2010
Citation: 
[Journal:] Public Choice [ISSN:] 1573-7101 [Volume:] 144 [Issue:] 3 [Pages:] 459-472
Abstract: 
Recent empirical studies have found evidence of unstable long run money demand functions if recent data are used. If the link between money balances and the macroeconomy is fragile, the rationale of monetary aggregates in the ECB strategy has to be doubted. In contrast we present a ``stable'' long run money demand relationship for M3 for the period 1983-2006. To obtain the result, the short run homogeneity restriction between money and prices is relaxed and a break in the income elasticity of money demand after 2001 is taken into account. Measures of excess liquidity do not show significant inflation pressures.
Subjects: 
Cointegration analysis
error correction
excess liquidity
monetary policy
money demand
JEL: 
C22
C52
E41
Persistent Identifier of the first edition: 
Additional Information: 
This publication was produced as part of the FINESS project, funded by the European Commission through the 7th Framework Programme under contract no. 217266 (http://www.finess-web.eu/).
Document Type: 
Article

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