An empirical examination of the inventory–theoretic model of precautionary money demand

Tin, Jan

doi:10.1016/j.econlet.2007.06.029

Cited by 6 publications

(5 citation statements)

References 7 publications

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“…Carroll () and Calvet and Sodini () present evidence that wealthier households tend to hold riskier assets, which may be interpreted as supporting evidence for

γ < 1

. More direct support for this hypothesis is provided in Fujiki and Hsiao () and Tin (), which provide evidence for an income elasticity of money demand between zero and one by estimating money demand functions on cross‐sectional data.…”

Section: The Lm Curvementioning

confidence: 91%

“…However, as noted above, Carroll (), Dynan et al . (), and Carvalho and Rezai () present evidence that

α > 1

, and Carroll (), Calvet and Sodini (), Fujiki and Hsiao (), and Tin () present evidence that

γ < 1

. As such, one would expect an increase in income inequality to shift the IS curve in and the LM curve out, as the average marginal propensity to save increases on the one hand, and average liquidity preference decreases on the other.…”

Section: Is‐lm Equilibriummentioning

confidence: 99%

See 1 more Smart Citation

Inequality and Aggregate Demand in the Is‐lm and Is‐mp Models

Jump

2017

Bulletin of Econ Res

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This paper presents an extension to the textbook IS‐LM and IS‐MP models that allows the short run effects of an increase in household income inequality to be studied in a simple manner. The income distribution is assumed to be log‐normal, and the coefficient of variation of income is assumed to be exogenous. The latter is used as the measure of income inequality, and enters otherwise standard IS and LM curves in a straightforward manner. While the models are highly stylised, they can easily be extended to more complicated variants.

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“…Carroll () and Calvet and Sodini () present evidence that wealthier households tend to hold riskier assets, which may be interpreted as supporting evidence for

γ < 1

Section: The Lm Curvementioning

confidence: 91%

“…However, as noted above, Carroll (), Dynan et al . (), and Carvalho and Rezai () present evidence that

α > 1

, and Carroll (), Calvet and Sodini (), Fujiki and Hsiao (), and Tin () present evidence that

γ < 1

Section: Is‐lm Equilibriummentioning

confidence: 99%

Inequality and Aggregate Demand in the Is‐lm and Is‐mp Models

Jump

2017

Bulletin of Econ Res

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“…They also suggest that households may respond more rapidly to changes in market interest rates than is often assumed. Tin (2008) examines the precautionary demand for transactions balances. The monetary measure considered is non-interest-earning checking accounts by households in the US.…”

Section: Related Studiesmentioning

confidence: 99%

Untitled

2014

JBFE

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In this paper we analyse household holdings of the broad monetary aggregate M3 in the euro area from 1991 until 2009. Households are the largest money-holding sector in the euro area. We develop four models, two in nominal, two in real terms, with satisfactory economic and statistical properties. The main determinants are a transactions variable, wealth considerations, opportunity costs and uncertainty. In particular housing wealth is found to play an important role. The models are robust to different estimation strategies, samples considered and a multitude of misspecification tests. According to our analysis, it is quite apparent that in equilibrium, households jointly determine consumption and broad money holdings which are both influenced by wealth as well as interest rates. The importance of household money holdings for consumption expenditures may cast doubt on a purely passive role for money.

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“…5. Tin (2008), for example, using information from the Survey of Income and Program Participation, estimates a precautionary money demand function for U.S. households that includes family traits. He finds that age and education correlates positively with non-interest earning checking accounts.…”

Section: Notesmentioning

confidence: 99%

Immigration and Large Banknotes

Fischer

2012

Macroecon. Dynam.

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Do immigrants have a higher demand for large-denominated banknotes than natives? This micro study examines whether banknote orders for CHF 1,000 notes are concentrated in Swiss municipalities with a high foreign-to-native ratio. The evidence for 251 Swiss municipalities finds that immigrants hoard fewer CHF 1,000 banknotes than natives. This empirical result means that immigration reduces seigniorage (per person) as measured by banknote orders. A 1% increase in the immigrant-to-native ratio is coincident with a reduction in banknote orders by CHF 4,000. This reduction is attributed to specific traits linked to immigrants.

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An empirical examination of the inventory–theoretic model of precautionary money demand

Cited by 6 publications

References 7 publications

Inequality and Aggregate Demand in the Is‐lm and Is‐mp Models

Inequality and Aggregate Demand in the Is‐lm and Is‐mp Models

Untitled

Immigration and Large Banknotes

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