The Long-Run Stability of the Demand for Money: Italy 1861 - 1996

Posted: 11 Dec 2001

See all articles by Anton Muscatelli

Anton Muscatelli

University of Glasgow - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Franco Spinelli

University of Brescia - Department of Economics

Abstract

This paper examines the stability of the demand for money in Italy using a newly extended data set for the period 1861 - 1996. We examine how the evolution of the financial system in Italy and policy shifts have affected the behavior of the long-run demand for money, and present tests of structural stability. We find the demand for broad money to be remarkably stable, despite periods of considerable economic turbulence. In addition, we present evidence on the monetary transmission mechanism. Our results shed light on attempts to model long-run relationships in other countries such as the UK and the US.

Keywords: Demand for money, Cointegration, Monetary transmission mechanism, Italian monetary history

JEL Classification: E41

Suggested Citation

Muscatelli, Vito Anton and Spinelli, Franco, The Long-Run Stability of the Demand for Money: Italy 1861 - 1996. Available at SSRN: https://ssrn.com/abstract=252341

Vito Anton Muscatelli (Contact Author)

University of Glasgow - Department of Economics ( email )

Adam Smith Building
Glasgow, Scotland G12 8RT
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Franco Spinelli

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

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