| ||||
|
Abstract:
Traditional studies of money demand for both developed and less developed
countries have shown that there are periods of "missing money," that is, there
is consistent overprediction of real balances. This paper uses cointegration
techniques to study the effects of financial innovation on the demand for real
balances in Bolivia, Israel, and Venezuela. The results show that financial
innovation can account for the instability of money demand observed in these
countries. In particular, I find that the long run demand for real balances
shifted down. In addition, I show that the speed at which people adjust their
demand for money when out of equilibrium increases following financial
innovation.
PDF files: Adobe Acrobat Reader ZIP files: PKWARE Home | IFDPs | List of 1996 IFDPs Accessibility To comment on this site, please fill out our feedback form. Last update: July 19, 2001 |
