Modeling Endogenous Monetary Stock Behavior. A Simultaneous Transfer Function Approach

H Singh

Empirical Economics, 1989, vol. 14, issue 4, 305 pages

Abstract: A structural model of demand and supply of money for the U.S. economy is estimated by the relatively new Simultaneous Transfer Function Method. This approach is motivated by (1) a need to impose valid identifying restrictions on the model and (2) to facilitate a systematic specification search process. The endogeneity of monetary stock is effectively dealt with at two levels. Policy-wise endogeneity is handled by defining the money supply variable as a ratio of observed and exogenous monetary stock (based on reserves supplied by the Fed). Statistical endogeneity is captured in a Simultaneous Equations System. Empirical results show that commercial banks are able to alter observed monetary stock behavior when the profitability of creating new loans (deposits) increases. This accommodation is, expectedly, fairly small and instantaneous.

Date: 1989
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:empeco:v:14:y:1989:i:4:p:291-305

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().