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Household money demand: The euro area case

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In this paper we analyse household holdings of the broad monetary aggregate M3 in the euro area from 1991 until 2010. We develop a nominal model with satisfactory economic and statistical properties. The main determinants are a transactions variable, wealth considerations, opportunity costs and uncertainty. The model is robust to different samples considered and a multitude of mis-specification tests. The exercise also provides insights that go beyond the portfolio allocation decision of households. According to our analysis, it is quite apparent that in equilibrium, households jointly determine consumption and broad money holdings both influenced by wealth as well as interest rates.


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Author information

Correspondence to Franz Seitz.

Additional information

We are grateful to Mika Tujula for providing euro area household wealth data, to Gabe de Bondt for sharing his equity market related measures and to Wolfgang Lemke for providing his uncertainty measures. Comments and suggestions by Huw Pill, Gianni Amisano, Thomas Westermann, participants at the ECB expert meeting on money demand and the ROME network as well as two anonymous referees are gratefully acknowledged.

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Seitz, F., von Landesberger, J. Household money demand: The euro area case. Swiss J Economics Statistics 148, 409–438 (2012).

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  • E41
  • C32
  • D12


  • money demand
  • cointegrated VARs
  • households