Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204924 
Year of Publication: 
2018
Series/Report no.: 
Discussion Papers No. 18-24
Publisher: 
University of Bern, Department of Economics, Bern
Abstract: 
This paper reconsiders the long-run demand for M2 based on a newly constructed dataset featuring 32 countries since the first half of the 19th century. The evidence from cointegration tests suggests that a long-run equilibrium relationship for M2 demand is hardly present. Specifically, only forfive countries (Finland, Korea, Mexico, Paraguay and Taiwan) cointegration tests produce strong evidence in favor of a stable long-run money demand. Evidence for Israel and Lebanon is weaker, but still points towards a stable long-run demand for M2. For all other countries evidence speaks against a stable money demand or it is mixed across money demand specifications and/or type of cointegration test.
Subjects: 
Money Demand
Velocity
Cointegration
JEL: 
E4
E41
Document Type: 
Working Paper

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