A Money Demand System for M3 in the Uniied Germany
نویسنده
چکیده
A small macroeconomic model is constructed starting from a German money demand relation for M3 based on quarterly, seasonally unadjusted data for the period from 1976 to 1996. In contrast to previous studies we build a vector error correction model for M3, GNP, an innation rate and an interest rate spread variable to represent opportunity costs of holding money. Furthermore, import price innation is added as an exogenous variable. The model is used to analyze the relation between money growth and innation by means of an impulse response analysis.
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