Sweep Programs: The Fall of M1 and Rebirth of the Medium of Exchange
Donald Dutkowsky () and
Journal of Money, Credit and Banking, 2003, vol. 35, issue 2, 263-79
This paper investigates the effect of sweep programs on M1 using dynamic simulations of money demand over 1994-2000. The postsample period constitutes when sweep programs have been in effect. All models generate predictions systematically above reported M1. Using data on newly initiated programs, test findings indicate that sweeps account for the overprediction within the conventional money demand model with a long-term interest rate. We construct a medium of exchange measure, M/S, equal to M1 plus estimated holdings of sweep balances. M/S velocity compares favorably with that of broader aggregates. Evidence indicates cointegration within M/S money demand.
References: Add references at CitEc
Citations View citations in EconPapers (28) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:35:y:2003:i:2:p:263-79
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 ().