Wealth and the demand for money in the European Union

Abstract

Wealth and the demand for money in the European UnionFase, M.M.G.; Winder, C.C.A. Published in: Empirical EconomicsLink to publication Citation for published version (APA):Fase, M. M. G., & Winder, C. C. A. (1998). Wealth and the demand for money in the European Union. Empirical Economics, 23, 507-524. General rightsIt is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulationsIf you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: http://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. Abstract. This study presents the results of an empirical analysis of the demand for money in the European Union as a whole over the period 1971±1995, with a particular focus on the impact of ®nancial wealth. The empirical evidence shows a substantial impact of wealth on the demand for M2 and M3, whereas no in¯uence of wealth on the demand for M1 is found. This ®nding may explain the remarkable increase of the broad monetary aggregates over the last decade or so. This means that taking into account the growth of wealth, the monetary expansion has been fairly modest. The evidence thus indicates that the strong increase of M2 and M3 should be attributed to portfolio investment considerations rather than to an expansionary monetary policy.

Narrow Money Demand in Indonesia and in Other Transitional Economies – Model Selection and Forecasting

“…The papers by (Hendry and Mizon, 1998) and (Ericsson, 1998) addressed the methodological issues of modeling money demand. In eight other papers, the authors discussed the practical aspects of modeling money demand in several European countries: (Ripatti, 1998) for Finland, (Eitrheim, 1998) for Norway, (Scharnagl, 1998) and (Lütkepohl and Wolters, 1998) for Germany, (Vega, 1998) for Spain, (Ericsson, Hendry, and Prestwich, 1998a) for the UK, (Ericsson and Sharma, 1998) for Greece, (Peytrignet and Stahel, 1998) for Switzerland and (Juselius, 1998;Fagan and Henry, 1998;Fase and Winder, 1998) for the European Union.…”