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The term structure of interest rates and the demand for money

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  • A. M. M. Jamal

Abstract

This paper investigates the money demand behaviour when the entire term structure of interest rates is taken into account. The results show that the interest elasticity of money demand does not vary with the level of the term structure of interest rates. It is also found that the quantity of money demanded varies directly with the tilt of the term structure. Both these findings have useful implications for macroeconomic policy and analysis.

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  • A. M. M. Jamal, 2002. "The term structure of interest rates and the demand for money," Applied Economics Letters, Taylor & Francis Journals, vol. 9(9), pages 571-573.
    • Handle: RePEc:taf:apeclt:v:9:y:2002:i:9:p:571-573
    DOI: 10.1080/13504850110108085
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    References listed on IDEAS

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    1. Fair, Ray C, 1987. "International Evidence on the Demand for Money," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 473-480, August.
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    6. Hamburger, Michael J., 1977. "Behavior of the money stock : Is there a puzzle?," Journal of Monetary Economics, Elsevier, vol. 3(3), pages 265-288, July.
    7. Allen, Stuart D. & Hafer, R. W., 1983. "Money demand and the term structure of interest rates : Some consistent estimates," Journal of Monetary Economics, Elsevier, vol. 11(1), pages 129-132.
    8. Heller, H Robert & Khan, Mohsin S, 1979. "The Demand for Money and the Term Structure of Interest Rates," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 109-129, February.
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