Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154362
Authors: 
Jung, Alexander
Year of Publication: 
2016
Series/Report no.: 
ECB Working Paper 1929
Abstract: 
The aim of the paper is to reassess the issue of money demand stability by estimating a portfolio demand approach for broad money M3 in the euro area covering the sample 1999 to 2013. The question is relevant, since in view of the massive shocks observed since the start of the financial crisis in 2007 relationships may have changed. Overall, the paper finds that the main components of euro area M3 are largely stable and can be explained by fundamental factors such as a transaction variable and opportunity costs. Nevertheless, the analysis detects some instabilities originating from the demand for currency in circulation linked to the euro cash changeover and for marketable instruments in an environment of very low interest rates.
Subjects: 
cointegration analysis
components of M3
financial crisis
money demand stability
JEL: 
C22
C52
E41
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2177-0
Document Type: 
Working Paper

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