Wealth and the demand for money in the European union

Carlo C. A. Winder () and Martin M.G. Fase ()
Additional contact information
Carlo C. A. Winder: Econometric Research and Special Studies Department, De Nederlandsche Bank NV, P.O. Box 98, 1000 AB Amsterdam, The Netherlands

Empirical Economics, 1998, vol. 23, issue 3, 507-524

Abstract: This study presents the results of an empirical analysis of the demand for money in the European Union as a whole over the period 1971-1995, with a particular focus on the impact of financial wealth. The empirical evidence shows a substantial impact of wealth on the demand for M2 and M3, whereas no influence of wealth on the demand for M1 is found. This finding may explain the remarkable increase of the broad monetary aggregates over the last decade or so. This means that taking into account the growth of wealth, the monetary expansion has been fairly modest. The evidence thus indicates that the strong increase of M2 and M3 should be attributed to portfolio investment considerations rather than to an expansionary monetary policy.

Keywords: Demand; for; money; ·; financial; wealth; ·; narrow; and; broad; money (search for similar items in EconPapers)
JEL-codes: E41 E52 (search for similar items in EconPapers)
Date: 1998-09-01
References: Add references at CitEc
Citations: View citations in EconPapers (56)

Downloads: (external link)
http://link.springer.de/link/service/journals/00181/papers/8023003/80230507.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

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:23:y:1998:i:3:p:507-524

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 ().