Is the Price Elasticity of Money Demand Always Unity?

Paul Evans and Xiaojun Wang ()

No 200508, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: Including both monetary gold and nonmonetary gold in a standard money-in-utility model, we establish a presumption that the price elasticity of money demand should be less than one under commodity standards. Applying cointegration methods to data of the world, the United Kingdom, and the United States, we find support for the new theory.

Keywords: money demand; price homogeneity; commodity standard (search for similar items in EconPapers)
JEL-codes: E41 E42 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2005
New Economics Papers: this item is included in nep-mac and nep-mon
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http://www.economics.hawaii.edu/research/workingpapers/WP_05-8.pdf First version, 2004 (application/pdf)

Related works:
Journal Article: IS THE PRICE ELASTICITY OF MONEY DEMAND ALWAYS UNITY? (2008)
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