Money Demand in a Banking Time Economy
نویسندگان
چکیده
The paper presents a theory of the demand for money that combines a special case of the shopping time exchange economy with the cash-in-advance framework. The model predicts that both higher inflation and financial innovation that reduces the cost of credit induce agents to substitute away from money towards exchange credit. This results in an interest elasticity of money that rises with the inflation rate rather than the constant elasticity found in standard shopping time specifications. A number of the key predictions of the banking time theory are tested using quarterly data for the US and Australia. We find cointegration empirical support for the model, with robustness checks and a comparison to a standard specification. JEL-Classification: O42, E13, E41, E51
منابع مشابه
Intraday Liquidity Demand of Banks in Real-Time Gross Settlement System
In this study a simulation analysis is applied to address the change in banks liquidity demand due to a shift in settlement method brought about by adopting Real Time Gross Settlement System. At the first stage of this research, we use a data generator model along with some information on the time distribution of coded cheques over a working day in order to produce intraday flow of payment...
متن کاملMoney Demand in China: A Banking Approach
China has been enjoyed a fast economic growth in the last three decades. One of the important reasons is its financial reform and development in banking sector. More and more foreign banks and nonstate-owned banks participate into the competition in banking industry. The productivity of banking sector keeps growing dramatically during the golden decade between the 1997 Asian financial crisis an...
متن کاملعوامل تعیینکننده نقدینگی در سطح بنگاههای تولیدی – یک رویکرد تقاضای پول
For the first time in the country, this research employs microeconomic fundamentals in a try to estimate and assess the factors that affect the liquidity in production enterprises. For this purpose, the enterprises' demand for money function were estimated with the data related to 161 production enterprises accepted to Tehran Stock Exchange within the 2000-2010 period including the third and fo...
متن کاملA Critical Discourse about Demand for Money Studies in the Iranian Economy (1989- 2000)
This paper provides a critical review of the demand for money estimation. In doing so, first we explain the main effective factors on the demand for money on the light of monetarists, which those are: transaction demand for money and opportunity cost of holding money. Then I have done a short report about the existing studies on the demand for money in the Iranian economy and have a special att...
متن کاملComparative analysis of the effects of monetary and government financial expenditures shocks in the context of fractional and full reserve banking in Iran: DSGE approach
The present study aims to investigate the effects of monetary and financial shocks on macroeconomic variables in fractional and full reserve banking conditions. To this end, two stochastic dynamic general equilibrium models have been designed in terms of the realities of Iran's economy and then the effects of shocks have been studied. After determining the input values of the model and estima...
متن کامل