The Income Elasticity of Money Demand: A Meta-Analysis of Empirical Results

9 Pages Posted: 6 Jul 2005

See all articles by Markus Knell

Markus Knell

Austrian National Bank - Economic Studies Division; University of Zurich

Helmut Stix

Oesterreichische Nationalbank - Economic Studies Division

Abstract

In this paper, we use meta-analytic methods to investigate possible sources for the large variation in empirical findings about the income elasticity of money demand. Our results suggest that the broadness of the monetary aggregate, the inclusion of wealth and the consideration of financial innovation exert a significant influence on estimated income elasticities. Furthermore, we find substantial cross-country differences, in particular between the US and other countries. These differences can, to some extent, be explained by the macrofeconomic environment and the dissemination of payment cards.

Suggested Citation

Knell, Markus and Stix, Helmut, The Income Elasticity of Money Demand: A Meta-Analysis of Empirical Results. Journal of Economic Surveys, Vol. 19, No. 3, pp. 513-533, July 2005, Available at SSRN: https://ssrn.com/abstract=748455

Markus Knell (Contact Author)

Austrian National Bank - Economic Studies Division ( email )

POB 61
Vienna, A-1011
Austria
+43 1 404 20 7205 (Phone)
+43 1 404 20 7299 (Fax)

HOME PAGE: http://www.oenb.at/

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Helmut Stix

Oesterreichische Nationalbank - Economic Studies Division ( email )

Otto-Wagner Platz 3
POB 61
Vienna 1011
Austria

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