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Asset Substitution and Aggregate Liquidity in Australia: 1969–1983 *
Author(s) -
HORNE JOCELYN,
MARTIN VANCE,
BONETTI SHANE
Publication year - 1986
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1986.tb00878.x
Subject(s) - market liquidity , asset (computer security) , economics , aggregate (composite) , currency , monetary economics , demand for money , sample (material) , construct (python library) , currency substitution , monetary policy , financial economics , foreign exchange risk , computer science , programming language , chemistry , materials science , computer security , chromatography , composite material
This paper has two goals. The first goal is to examine the degree of substitutability between various bank and non‐bank assets and a reference asset using A ustralian quarterly data for the sample period 1969(4)‐1983(2). Particular attention is directed towards quantifying the degree of liquidity of financial innovations introduced recently into the A ustralian financial sector. The second goal is to construct a weighted monetary aggregate series derived. explicitly from microeconomic consumer demand theory. While both the bank innovations and building society deposits are close substitutes for currency, the aggregation restrictions implicit in the Australian monetary aggregates beyond Ml are violated.