An empirical examination of the inventory-theoretic model of precautionary money demand
Jan Tin ()
Economics Letters, 2008, vol. 99, issue 1, 204-205
This study examines the empirical contents of precautionary demand for transactions money balances. Panel data are utilized to construct estimates of income variance. Regression results indicate that income uncertainty has a positive effect on precautionary money demand, but the magnitude of the elasticity of income variance falls far short of those suggested by economic theories.
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:99:y:2008:i:1:p:204-205
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