Transaction Technology Innovation and Demand for Overnight Deposits in Italy

Francesco Columba

Macroeconomics from University Library of Munich, Germany

Abstract: The rapid diffusion of ATM and POS during the last decade may have changed money demand patterns; therefore, standard econometric analysis of money demand that do not account for these developments may suffer from a potentially serious omitted variable problem. This paper analyzes the effect of transaction technology innovation on overnight (i.e. demand) deposits. Using panel data for Italy we have two results. First, transaction technology innovation has a positive effect on demand deposits. Second, accounting for this innovation in the regressions significantly reduces the income elasticity of money demand typically detected in the existing empirical estimates.

Keywords: Money demand; payment economics; transaction technology; ATM; POS. (search for similar items in EconPapers)
JEL-codes: E41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2004-04-14
Note: Type of Document - pdf; pages: 34
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Transaction Technology Innovation and Demand for Overnight Deposits in Italy (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0404011

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