Money Demand Function of Monetary Base at Zero Interest Rates through Analyzing Cointegration and the Liquidity Trap

Money Demand Sensitivity to Interest Rates: the Case of Japan’s Zero-interest Rate Policy

The goal of this paper is to provide new evidence on how the zero-interest rate policy implemented by the Bank of Japan has affected the sensitivity of money demand with respect to the opportunity cost of holding money. To the empirical ends of the analysis, the study makes use of the univariate conditional autoregressive value-at-risk (CAViaR) estimator to obtain robust quantile measures. The ...

Estimating And Forecasting Demand For Broad Money In Iran Through Cointegration Analysis And Stochastic Simulation

Monetary Policy: Why Money Matters and Interest Rates Don’t

Since the late 1980s the Fed has implemented monetary policy by adjusting its target for the overnight federal funds rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists suggest that money is irrelevant for monetary policy: Central banks effect economic activity and inflation by a) controlling a very shortterm nominal interest rate and b) by i...

The Zero Bound on Interest Rates and Optimal Monetary Policy

We consider the consequences for monetary policy of the zero floor for nominal interest rates. The zero bound can be a significant constraint on the ability of a central bank to combat deflation. We show, in the context of an intertemporal equilibrium model, that open-market operations, even of “unconventional” types, are ineffective if future policy is expected to be purely forward-looking. No...

Multivariate Panel Cointegration Models and Money Demand Function

Is just only one cointegrating vector among the panel variables? Based on the multivariate maximum likelihood cointegration tests offered by Larsson et al. (2001), the findings here provide solid evidence of the presence of at least two cointegrated vectors for the money demand function in GCC countries,