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Money Demand in theEuroArea: Do National Differences Matter?

Luca Dedola (), Eugenio Gaiotti () and Luca Silipo
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Luca Silipo: Bank of Italy

Macroeconomics from University Library of Munich, Germany

Abstract: This paper assesses the relevance of national information in estimating the demand for euro-area M3 from three perspectives. First, we check whether national money demands can legitimately be aggregated. Second, we compare time-series and panel methods to estimate aggregate long-run coefficients. Finally, we investigate the differences among national money demands. We find that the hypothesis of perfect aggregation is not rejected. Nevertheless, some estimates of area-wide long-run parameters are sensitive to the method used to combine national information. The main difference among individual countries’ money demands is their interest elasticity.

Keywords: money demand; aggregation; European Central Bank. (search for similar items in EconPapers)
JEL-codes: E41 C22 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon
Date: 2004-04-24, Revised 2004-04-24
Note: Type of Document - pdf
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Working Paper: Money demand in the euro area: do national differences matter? (2001) Downloads
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