Currency Substitution and Cross-Border Monetary Aggregation: Evidence From the G-7
- 1 January 1992
- journal article
- Published by International Monetary Fund (IMF) in IMF Working Papers
- Vol. 92 (81)
- https://doi.org/10.5089/9781451955040.001
Abstract
Is there a stable aggregate money demand relationship for Europe? If so, why, and if not, why not? These questions are important for the implementation of policy by a European central bank, as well as for the appropriate speed of transition to EMU. This paper addresses them in a multi-country empirical study of money demand for the G-7 countries during the period since 1973. It looks for evidence of currency substitution and tests the restrictions implied by cross-border aggregation within Europe.Keywords
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