Money demand in Europe: Evidence from the past

Christian Müller and Elke Hahn

No 2000,35, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: The conditions under which European monetary policy is likely to be conducted are investigated by means of multi-variate time series modelling using aggregated data of all eleven European Monetary Union member states. A cointegration analysis identifies two stable long-run relationships within a set of five key macroeconomic variables, one of which can be interpreted as a money demand function and a sec(md one as a long term real interest rate (Fisher parity). Our findings indicate that monetary authorities might well be able to base their policy on the existence of a money demand. Particular emphasis is given both to the data sources and their aggregation, by providing a transparent account of our calculation procedure, which is not yet common in the existing literature.

Keywords: european money demand; monetary targeting; aggregation (search for similar items in EconPapers)
JEL-codes: C32 E41 E52 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:200035

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