Money demand under free banking: Switzerland 1851–1906

Stefan Gerlach () and Peter Kugler ()
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Stefan Gerlach: BSI Bank
Peter Kugler: University of Basel

Swiss Journal of Economics and Statistics, 2018, vol. 154, issue 1, 1-8

Abstract: Abstract This paper studies money demand in Switzerland under free banking before the establishment of the Swiss National Bank. We find that, in addition to income, the banks’ balance-sheet-to-GDP ratio and the number of banks were important determinants of long-run money demand. The former variable also played an important role in the monetary adjustment process. We also detect a strong positive long-run impact of real income on the bank’s balance-sheet-total-to-GDP ratio and a strong long-run influence of real income and the interest rate spread on the number of banks.

Keywords: Free banking; Money demand; Monetary dynamics; Switzerland; E41; E42; N13 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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DOI: 10.1186/s41937-017-0013-8

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