Currency substitution and the stability of the Italian demand for money before the entry into the monetary union, 1972 - 1998

Hannah Nielsen, Giuseppe Tullio and Juergen Wolters

No 2000,66, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: A money demand function for M2 is estimated for Italy for the period 1972-1998 within an error correction framework. This period has been characterized by major structural changes in the Italian financial system and by major changes in monetary policy. This study takes these changes into account. Moreover, currency substitution, especially between Italy and Germany is incorporated into the model. By accounting for structural breaks and currency substitution a stable money demand function can be found.

Keywords: Money demand; error correction model; structural changes (search for similar items in EconPapers)
JEL-codes: C22 E41 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Currency substitution and the stability of the Italian demand for money before the entry into the monetary union, 1972–1998 (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:200066

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