Money Demand in Europe

An Empirical Approach

  • Christian Müller

Part of the Contributions to Economics book series (CE)

Table of contents

  1. Front Matter
    Pages I-XIII
  2. Christian Müller
    Pages 1-3
  3. Christian Müller
    Pages 5-37
  4. Christian Müller
    Pages 171-220
  5. Christian Müller
    Pages 221-223
  6. Back Matter
    Pages 225-242

About this book


The EURO has now been in place for more than two years, but only the future will tell if the ECB policy proves successful in the long-term. Whether the monetary authorities have sufficient information, and more important, the right information to manage the EURO currency, has been an open question and will remain so for some time to come. This book discusses the economic principals underlying the demand for money as a potentially useful relationship for policy makers, and the possibilities to recover its properties by means of multivariate time series analysis. It applies the outcome of these considerations to the whole EURO area as well as to France. While for the aggregate, a money demand function can be specified and be shown to have good forecasting properties, this fails in the French case. This book puts forth economic arguments that attempt to explain this. At various steps of the analysis, special attention is given to breaks in time series data. The presentation carefully outlines all means that have been used to cope with shifts in coefficients of the cointegration relations. A separate chapter is dedicated to testing for unit roots in time series with level shifts. This includes detection of break points, provision of test statistics, graphical evaluation of the empirical models and illustration of the procedure with a large set of international macroeconomic data.


Cointegrated Time Series Analysis Europe European Monetary Union Money Demand Structural Breaks Unit Root Tests cointegration monetary policy monetary union statistics time series time series analysis

Authors and affiliations

  • Christian Müller
    • 1
  1. 1.Swiss Federal Institute of Technology Zurich Swiss Institute for Business Cycle ResearchETH Zentrum WEHZürichSwitzerland

Bibliographic information

  • DOI
  • Copyright Information Physica-Verlag Heidelberg 2003
  • Publisher Name Physica, Heidelberg
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-7908-0064-7
  • Online ISBN 978-3-642-57400-9
  • Series Print ISSN 1431-1933
  • Buy this book on publisher's site