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CROSS‐COUNTRY ESTIMATES OF THE DEMAND FOR MONEY AND ITS COMPONENTS
Author(s) -
KENNY LAWRENCE W.
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb00855.x
Subject(s) - economics , speculative demand , demand for money , demand deposit , monetary economics , inflation (cosmology) , currency , aggregate demand , sample (material) , demand curve , broad money , demand shock , demand management , monetary base , monetary policy , macroeconomics , microeconomics , chemistry , physics , chromatography , theoretical physics
The demand for money aggregates (M1, M2) and their components (currency, demand deposits, and time deposits) are estimated using a sample of 103 countries at two time periods. Money demand is found to be affected by age, literacy, industrial development, and political structure, as well as income and inflation. This expanded demand function helps to explain the considerable changes in money demand that have occurred over long periods and the large variation in money demand found across countries. The knowledge thus gained is useful for understanding differences in monetary and taxation policies across countries.