The myth of a stable European money demand

Ivo Arnold ()

Open Economies Review, 1994, vol. 5, issue 3, pages 249-259

Abstract: Recent empirical studies suggest that an aggregate EC-wide money demand function is more stable than national money demand functions in the European Community. If true, this would facilitate monetary policy after Economic and Monetary Union. The evidence presented in this paper, however, shows that in general there is no relationship between the size of a currency area and the stability of its demand for money. I conclude that the stability of European money demand is a statistical artifact and has nothing to say about money demand stability in a future larger European currency area. Copyright Kluwer Academic Publishers 1994

Keywords: money demand; EMU; aggregation (search for similar items in EconPapers)
Date: 1994
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Persistent link: http://EconPapers.repec.org/RePEc:kap:openec:v:5:y:1994:i:3:p:249-259

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