The Life-Cycle Motive and Money Demand: Further Evidence

Jan Tin ()
Additional contact information
Jan Tin: Commerce Department

Economics Bulletin, 2008, vol. 5, issue 18, 1-12

Abstract: This study takes a closer look at the relationship between money demand and the life-cycle motive using panel data from the Survey of Income and Program Participation. Findings indicate that the life-cycle motive exerts a direct impact on household demand for interest-earning monetary assets, but not on non-interest-earning checking deposits. The strength of the relationship, however, varies among households with divergent characteristics. There is no evidence of a unitary income elasticity for both interest- and non-interest-yielding monetary assets. The demand for interest-earning monetary assets is very sensitive to changes in the own rate of interest, but the interest rate elasticity for non-interest-earning checking accounts is quite small.

Keywords: life-cycle; motive (search for similar items in EconPapers)
JEL-codes: E0 E4 (search for similar items in EconPapers)
Date: 2008-05-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2008/Volume5/EB-07E40002A.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-07e40002

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().