Asset Substitution, Money Demand, and the Inflation Process in Brazil

Charles Calomiris and Ian Domowitz

Journal of Money, Credit and Banking, 1989, vol. 21, issue 1, 78-89

Abstract: Various domestic financial assets in Brazil have provided relatively liquid nonmonetary alternatives. Monthly money demand estimates, which include domestic asset opportunity costs and take account of T-bill repurchase agreements in a dynamic error-correction model, demonstrate the importance of domestic substitutes in explaining money holdings. Money demand appears responsive and stable. Moreover, T-bills and indexed bonds have acted as an alternative to central bank liabilities as a source of finance for government deficits. Evidence indicates that the initial financing of government deficits through bonds, bills, and other nonmonetary liabilities may explain why money lags price shocks rather than vice versa. Copyright 1989 by Ohio State University Press.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819890 ... 0.CO%3B2-U&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:mcb:jmoncb:v:21:y:1989:i:1:p:78-89

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().