Limited Commitment and the Demand for Money.

Understanding money demand is important for our comprehension of macroeconomics and monetary policy. Its instability has made this a challenge. Common explications for the instability are financial regulations and financial innovations that shift the money demand function. We provide a complementary...

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Publicado en:Economic Journal Vol. 128; no. 610; pp. 1128 - 1157
Autores principales: Berentsen, Aleksander, Huber, Samuel, Marchesiani, Alessandro
Formato: Artículo
Publicado: Oxford University Press / USA May2018
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Limited Commitment and the Demand for Money.
      aug:
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          Berentsen, Aleksander
          Huber, Samuel
          Marchesiani, Alessandro
        affil:
          University of Basel and Federal Reserve Bank of St. Louis
          University of Basel
          University of Liverpool
      su:
        Macroeconomics
        Economic demand
        Demand for money
        Monetary policy
        Interest rates
        Credit control
      sug:
        subj:
          Macroeconomics
          Economic demand
          Other Activities Related to Credit Intermediation
          Demand for money
          Monetary policy
          Interest rates
          Credit control
      ab: Understanding money demand is important for our comprehension of macroeconomics and monetary policy. Its instability has made this a challenge. Common explications for the instability are financial regulations and financial innovations that shift the money demand function. We provide a complementary view by showing that a model where borrowers have limited commitment can significantly improve the fit between the theoretical money demand function and the data. Limited commitment can also explain why the ratio of credit to M1 is currently so low, despite that nominal interest rates are at their lowest recorded levels.
      pubtype: Academic Journal
      doctype: Article
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    language: English
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