文档库

最新最全的文档下载
当前位置:文档库 > On the stability of money demand

On the stability of money demand

Federal Reserve Bank of Minneapolis

Research Department Working Paper 718

Revised September 2015

On the Stability of Money Demand*

Robert E. Lucas Jr.

University of Chicago

Juan Pablo Nicolini

Federal Reserve Bank of Minneapolis

and Universidad Di Tella

ABSTRACT __________________________________________________________________________________ We show that regulatory changes that occurred in the banking sector in the early eighties, that considerably weakened Regulation Q, can explain the apparent instabilty of money demand starting in the same period. We evaluate the effects of the regulatory changes using a model that goes beyond aggregates as M1 and treats currency and different deposit types as alternative means of payments. We use the model to construct a new monetary aggregate that performs remarkably well for all the period 1915–2012.

Keywords: Money demand; Monetary base

JEL classification: E40, E41

_____________________________________________________________________________________________ *This paper was presented at the November 2014 Carnegie Rochester NYU Conference on Public Policy. We thank Fernando Alvarez, Uberto Ennis, Peter Ireland, Finn Kydland, Ricardo Lagos, Francesco Lippi, Andy Neumeyer, Fabrizio Perri, Nancy Stokey, Pedro Teles and Randy Wright for helpful discussions and Joao Ayres, Manuel Macera and Serginio Sylvain for outstanding assistance. The views expressed herein are those of the authors and not neces-sarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.