Monetary Union, Money Demand and Money Supply: A Review of the German Monetary Union

Juergen von Hagen

No 719, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We present an empirical analysis of German money demand, money supply and monetary policy after German monetary union in 1990. Empirical models for velocity and forecast models for the money multiplier are estimated. Stability analysis reveals that structural stability of the demand for broad money after monetary union must be rejected; stability of the demand for narrow money can be accepted. East German portfolio adjustment with regard to the structure of monetary portfolios occurred quite rapidly. The increase in monetary control uncertainty caused by these adjustments did not, however, impede monetary targeting with reasonable precision.

Keywords: Monetary Policy; Monetary Union; Money Demand (search for similar items in EconPapers)
JEL-codes: F31 F33 F36 (search for similar items in EconPapers)
Date: 1992-10
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Citations: View citations in EconPapers (4)

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Journal Article: Monetary union, money demand, and money supply: A review of the German monetary union (1993)
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