Cuberes, David and Dougan, William (2009): How Endogenous Is Money? Evidence from a New Microeconomic Estimate.
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This paper uses microeconomic data on firms’ money demand and investment in physical capital for the period 1983-2006 to estimate the extent to which variation in the U.S. money supply is an endogenous response to variation in firms’ demand for liquidity. We estimate a simple model in which each firm’s desired money balances in any period depend on that firm’s current transactions, current investment, and its planned future investment, as well as aggregate variables such as interest rates and common policy forecasts. Calculations based on our estimates suggest that only a very small fraction of the variability in the aggregate stock of money represents an endogenous response to autonomous changes in firms’ investment plans.
|Item Type:||MPRA Paper|
|Original Title:||How Endogenous Is Money? Evidence from a New Microeconomic Estimate|
|Keywords:||Money demand, money supply, endogenous money, monetary neutrality|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply; Credit; Money Multipliers
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money
|Depositing User:||David Cuberes|
|Date Deposited:||09. Oct 2009 10:46|
|Last Modified:||17. Feb 2013 11:03|
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