Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/153672 
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper No. 1238
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
In this paper we analyse household holdings of the broad monetary aggregate M3 in the euro area from 1991 until 2009. We develop four models, two in nominal, two in real terms, with satisfactory economic and statistical properties. The main determinants are a transactions variable, wealth considerations, opportunity costs and uncertainty. The models are robust to different estimation strategies, samples considered and a multitude of mis-specification tests. The exercise also provides insights that go beyond the portfolio allocation decision of households. According to our analysis, it is quite apparent that in equilibrium, households jointly determine consumption and broad money holdings both influenced by wealth as well as interest rates.
Subjects: 
cointegrated VARs
households
Money demand
JEL: 
E41
C23
C32
D21
Document Type: 
Working Paper

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