Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212012 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 14/2005
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper presents a model on the demand for money market funds (MMFs).These funds are a very close substitute for M1 deposits, except that MMFs do not satisfy immediate transaction requirements. The demand for MMFs strengthens when the intended volume of transactions is low.A high interest rate level makes it expensive to hold M1 deposits.High interest rate volatility, paradoxically, increases the risk of holding M1 deposits stronger than the risk of holding MMFs.The results are largely corroborated by Finnish data.
Subjects: 
money market mutual funds
money demand
JEL: 
G23
G29
E41
Persistent Identifier of the first edition: 
ISBN: 
952-462-218-1
Document Type: 
Working Paper

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