MONEY DEMAND STABILITY AND INFLATION PREDICTION IN THE FOUR LARGEST EMU COUNTRIES.

In this paper, we analyze the money demand functions of the four largest EMU countries and of the four-country (EMU-4) aggregate. We identify reasonable and stable money demand relationships for Germany, France and Spain as well as the EMU-4 aggregate. For the case of Italy, results are less clear....

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Publicado en:Scottish Journal of Political Economy Vol. 56; no. 1; pp. 73 - 94
Autores principales: Carstensen, Kai, Hagen, Jan, Hossfeld, Oliver, Neaves, Abelardo Salazar
Formato: Artículo
Publicado: Wiley-Blackwell Feb2009
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        10.1111/j.1467-9485.2009.00473.x
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        atl: MONEY DEMAND STABILITY AND INFLATION PREDICTION IN THE FOUR LARGEST EMU COUNTRIES.
      aug:
        au:
          Carstensen, Kai
          Hagen, Jan
          Hossfeld, Oliver
          Neaves, Abelardo Salazar
        affil:
          Ifo Institute for Economic Research and Ludwig Maximilians University of Munich, Germany
          European University Institute, Italy
          Leipzig Graduate School of Management, Germany
          University of Nottingham, UK
      su:
        Demand for money
        Liquidity (Economics)
        Economic demand
        Economic policy
        Economic conditions in Europe, 1945-
        International liquidity
        Europe
      sug:
        subj:
          Europe
          Demand for money
          Liquidity (Economics)
          Economic demand
          Economic policy
          Economic conditions in Europe, 1945-
          International liquidity
      keyword:
        E41
        E52
        inflation forecast
        Money demand
        money overhang
        stability
      ab: In this paper, we analyze the money demand functions of the four largest EMU countries and of the four-country (EMU-4) aggregate. We identify reasonable and stable money demand relationships for Germany, France and Spain as well as the EMU-4 aggregate. For the case of Italy, results are less clear. From the estimated money demand functions, we derive both EMU-4 and country-specific measures of money overhang. We find that the EMU-4 overhang measure strongly correlates with the country-specific measures, particularly since the start of EMU, and is useful to predict country-specific inflation. However, it generally does not encompass country-specific money overhang measures as predictors of inflation. Hence, aggregate money overhang is an important, but by far not an exhaustive, indicator for the disaggregate level.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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