Why has broad money demand been more stable in the euro area than in other economies? A literature review

Alessandro Calza and João Sousa

No 261, Working Paper Series from European Central Bank

Abstract: Based on a literature review, this paper investigates the reasons why broad money demand has usually been found to be more stable in the euro area than in other large economies. The paper concludes that there are three main explanations for this fact. First, in some countries outside the euro area the sources of instabilities in money demand were country-specific. Second, financial innovation appears to have had a weaker impact on money demand in the euro area than in other economies. A third explanation is that there are gains in terms of stability in aggregating the money demand of the individual euro area countries. JEL Classification: E41, C22, C32

Keywords: aggregation; euro area; financial innovation; money demand (search for similar items in EconPapers)
Date: 2003-09
Note: 338639
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2003261

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