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Why has Broad Money Demand been More Stable in the Euro Area than in Other Economies? A Literature Review

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Calza, A., Sousa, J. Why has Broad Money Demand been More Stable in the Euro Area than in Other Economies? A Literature Review. Credit and Capital Markets – Kredit und Kapital, 40(1), 145-163. https://doi.org/10.3790/ccm.40.1.145
Calza, Alessandro and Sousa, João "Why has Broad Money Demand been More Stable in the Euro Area than in Other Economies? A Literature Review" Credit and Capital Markets – Kredit und Kapital 40.1, 2007, 145-163. https://doi.org/10.3790/ccm.40.1.145
Calza, Alessandro/Sousa, João (2007): Why has Broad Money Demand been More Stable in the Euro Area than in Other Economies? A Literature Review, in: Credit and Capital Markets – Kredit und Kapital, vol. 40, iss. 1, 145-163, [online] https://doi.org/10.3790/ccm.40.1.145

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Why has Broad Money Demand been More Stable in the Euro Area than in Other Economies? A Literature Review

Calza, Alessandro | Sousa, João

Credit and Capital Markets – Kredit und Kapital, Vol. 40 (2007), Iss. 1 : pp. 145–163

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Article Details

Author Details

Alessandro Calza, Frankfurt/M.

João Sousa, Lisbon

References

  1. Altissimo, F., Gaiotti, E. and Locarno, A. (2001): "Monetary analysis in Bank of Italy prior to EMU: The role of real and monetary variables in the models of the Italian Economy" in Klöckers, H. J. and Willeke, C. (eds.) European Central Bank, Seminar on Monetary Analysis: Tools and Applications, ECB, Frankfurt am Main, pp. 145-164.  Google Scholar
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Abstract

Based on a literature survey, this paper reviews the factors that may explain why broad money demand has usually been found to be more stable in the euro area than in other large economies, such as Japan, the US and the UK. The paper concludes that there are three main explanations for this fact. First, some of the sources of instabilities in money demand outside the euro area were country-specific. Second, financial innovation appears to have had a weaker impact on money demand in the euro area than in other economies. A third explanation is that there are gains in terms of stability in aggregating the money demand of the individual euro area countries. (JEL E41, C22, C32)