Working Paper
Endogenous financial innovation and the demand for money
Abstract: This paper embeds two key ideas about the nature of financial innovation taken from the empirical literature into a familiar equilibrium monetary model. It provides formal support for several alternative econometric specifications for money demand that attempt to capture the effects of financial innovation and demonstrates that a popular theoretical model of money demand, when suitably modified, can account for some unusual monetary dynamics found in the data. Thus, it helps to establish both the theoretical relevance of recent empirical work and the empirical relevance of recent theoretical work on the demand of money.
Keywords: Money theory; Financial services industry;
Access Documents
File(s): File format is text/html http://www.richmondfed.org/publications/research/working_papers/1992/wp_92-3.cfm
File(s): File format is application/pdf http://www.richmondfed.org/publications/research/working_papers/1992/pdf/wp92-3.pdf
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Working Paper
Publication Date: 1992
Number: 92-03