2003
DOI: 10.1515/jbnst-2003-0302
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Money Stock, Monetary Base and Bank Behavior in Germany / Geldmenge, Geldbasis und Bankenverhalten in Deutschland

Abstract: SummaryThis paper contributes to the analysis of the money supply process in Germany during the period of monetary targeting by the Bundesbank from 1975-1998. While the standard money multiplier approach assumes that the money stock is determined by the money multiplier and the monetary base it is argued here that both the money stock and the monetary base are determined endogenously by the optimizing behavior of commercial banks and private agents like households and firms. An industrial organization style mo… Show more

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Cited by 4 publications
(3 citation statements)
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“…In this paper we apply the econometric methodology proposed by Howells and Hussein (1998), Holtemöller (2003), Cifter and Ozun (2007), Badarudin et al (2013), and by Deleidi and Levrero (2019). Furthermore, we introduce some methodological innovations concerning the estimation of structural breaks and the cointegration test.…”
Section: Methodsmentioning
confidence: 99%
See 1 more Smart Citation
“…In this paper we apply the econometric methodology proposed by Howells and Hussein (1998), Holtemöller (2003), Cifter and Ozun (2007), Badarudin et al (2013), and by Deleidi and Levrero (2019). Furthermore, we introduce some methodological innovations concerning the estimation of structural breaks and the cointegration test.…”
Section: Methodsmentioning
confidence: 99%
“…Howells and Hussein (1998) apply a causality test within a vector error-correction model (VECM) and find empirical evidence for the endogeneity of the money supply process in G-7 countries. Similarly, using a VECM on German data, Holtemöller (2003) finds out that monetary aggregates are determined endogenously in the loans and the reserves markets, respectively. Also, Cifter and Ozun (2007) find empirical evidence of money supply endogeneity in a VECM analysis of the monetary transmission mechanism in Turkey.…”
Section: 𝐶 ≡ 𝐷mentioning
confidence: 99%
“…Similar results emerge for other developed countries when applying the VAR and the vector error-correction model (VECM) econometric methods (cf. for instance Arestis, 1987;Badarudin, Ariff, & Khalid, 2013;Carpenter & Demiralp, 2012;Foster, 1994;Holtemöller, 2003;Howells & Hussein, 1998;Palacio Vera, 2001). In particular, Howells and Hussein (1998) applied a causality test within a VECM finding some empirical evidence for money supply endogeneity in G-7 countries together with signs of reverse causality from deposits to loans that they interpreted as evidence of money as an asset against Moore's idea of a limitless demand for money (cf.…”
Section: Loans and Bank Reservesmentioning
confidence: 99%