IS THE PRICE ELASTICITY OF MONEY DEMAND ALWAYS UNITY?

Paul Evans and Xiaojun Wang ()

Economic Inquiry, 2008, vol. 46, issue 4, 587-592

Abstract: Including both monetary gold and nonmonetary gold in a standard money‐in‐utility model, we establish a presumption that the price elasticity of money demand should be less than 1 under commodity standards. Applying cointegration methods to data of the world, the United Kingdom, and the United States, we find support for the new theory. (JEL E41, E42)

Date: 2008
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https://doi.org/10.1111/j.1465-7295.2007.00113.x

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Working Paper: Is the Price Elasticity of Money Demand Always Unity? (2005)
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