Japanese Demand for M1 and Demand Deposits: Cross-Sectional and Time-Series Evidence from Japan

Hiroshi Fujiki and Kiyoshi Watanabe
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Kiyoshi Watanabe: Institute for Monetary and Econ Studies, Bank of Japan

Monetary and Economic Studies, 2004, vol. 22, issue 3, pages 47-77

Abstract: We investigate the relationship between money, short-term interest rates, and scale variables. We use three monetary aggregates: Ml , demand deposits, and cash currency in circulation. Regional cross- sectional data yield stable estimates of the income elasticity of demand deposits that are positive and close to unity. We impose the estimated income elasticity obtained from cross-sectional data and estimate double- log interest rate elasticities of demand for Ml velocities and demand- deposit velocities using time-series data.

JEL-codes: E43 E52 E41 (search for similar items in EconPapers)
Date: 2004

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Persistent link: http://EconPapers.repec.org/RePEc:ime:imemes:v:22:y:2004:i:3:p:47-77

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