Bank Health Concerns, Low Interest Rates, and Money Demand: Evidence from the Public Opinion Survey on Household Financial Assets and Liabilities

Hiroshi Fujiki and Etsuro Shioji

Monetary and Economic Studies, 2006, vol. 24, issue 2, 73-124

Abstract: This paper uses household survey data that cover the period from 2001 through 2003 to study the cash and deposits demand of households. These data enable us to obtain empirical findings that could not previously be derived through analyses using conventional macroeconomic time-series data. First, for asset demand, we find that the fluctuations in the extensive margin (the decisions on whether or not to hold a financial product) are sometimes more important than the fluctuations in the intensive margin (the decisions on the amounts of the financial product held). Second, we conduct detailed analyses on the causes of fluctuations in the cash demand of individual households. Third, thanks to qualitative questions in our dataset, we manage to distinguish between the fluctuations in asset demand due to low interest rates and those in response to various measures that are aimed at enhancing the safety of household savings. Fourth, we quantify the economic effects of personal financial education.

Keywords: Money demand; Low interest rates; Concern for the soundness of private financial institutions; Micro data; Self-selection bias; Personal financial education; Extensive margin; Intensive margin (search for similar items in EconPapers)
JEL-codes: C34 C35 D12 E21 E41 E51 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ime:imemes:v:24:y:2006:i:2:p:73-124

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