Broad Money Demand and Financial Liberalization in Greece

July 1, 1996

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Format: Chicago

Sunil Sharma, and Neil R. Ericsson Broad Money Demand and Financial Liberalization in Greece, (USA: International Monetary Fund, 1996) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper develops a constant, data-coherent, error correction model for broad money demand (M3) in Greece. The model contributes to a better understanding of the effects of monetary policy in Greece, and of the portfolio consequences of financial innovation in general. The broad monetary aggregate M3 was targeted until recently, and current Greek monetary policy still uses such aggregates as guidelines, yet analysis of this aggregate has been dormant for over a decade. Inspite of large fluctuations in the inflation rate, introduction of new financial instruments, and liberalization of the financial system, the estimated model is remarkably stable. The dynamics of money demand are important, with price and income elasticities being much smaller in the short run than in the long run.

Subject: Demand for money, Deposit rates, Financial institutions, Financial services, Inflation, Monetary base, Money, Prices, Treasury bills and bonds

Keywords: Broad money, Constant term, Demand deposit, Demand for money, Deposit rates, Inflation, Modeling money demand, Monetary base, Money demand, Money demand equation, Money demand function, Money demand model, Money demand relation, Price level, Rate of inflation, Rate of return, Treasury bill rate, Treasury bills and bonds, WP

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/062
Stock No:

WPIEA0621996
ISBN:

9781451848243
ISSN:

1018-5941

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