Premium
The Income Elasticity of Money Demand: A Meta‐Analysis of Empirical Results *
Author(s) -
Knell Markus,
Stix Helmut
Publication year - 2005
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.0950-0804.2005.00257.x
Subject(s) - economics , income elasticity of demand , payment , wealth elasticity of demand , elasticity (physics) , monetary economics , econometrics , demand for money , empirical research , price elasticity of demand , macroeconomics , monetary policy , microeconomics , finance , philosophy , materials science , epistemology , composite material
. In this paper, we use meta‐analytic methods to investigate possible sources for the large variation in empirical findings about the income elasticity of money demand. Our results suggest that the broadness of the monetary aggregate, the inclusion of wealth and the consideration of financial innovation exert a significant influence on estimated income elasticities. Furthermore, we find substantial cross‐country differences, in particular between the US and other countries. These differences can, to some extent, be explained by the macrofeconomic environment and the dissemination of payment cards.