Abstract
This paper analyzes the role of the risk in the form of the volatility of open market interest rates as a factor in the demand for money. We demonstrate, using an inventory theoretic model of money demand, that increases in interest rate volatility will increase the demand for money. We then present empirical evidence that the demand for money has been influenced by alterations in the volatility of open market rates using standard specifications of the demand for money.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 475-482 |
| Number of pages | 8 |
| Journal | Journal of Monetary Economics |
| Volume | 12 |
| Issue number | 3 |
| DOIs | |
| State | Published - 1983 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Economics and Econometrics
- Finance
Cite this
Money, interest rates, and risk. / Slovin, Myron B.; Sushka, Marie.
In: Journal of Monetary Economics, Vol. 12, No. 3, 1983, p. 475-482.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Money, interest rates, and risk
AU - Slovin, Myron B.
AU - Sushka, Marie
PY - 1983
Y1 - 1983
N2 - This paper analyzes the role of the risk in the form of the volatility of open market interest rates as a factor in the demand for money. We demonstrate, using an inventory theoretic model of money demand, that increases in interest rate volatility will increase the demand for money. We then present empirical evidence that the demand for money has been influenced by alterations in the volatility of open market rates using standard specifications of the demand for money.
AB - This paper analyzes the role of the risk in the form of the volatility of open market interest rates as a factor in the demand for money. We demonstrate, using an inventory theoretic model of money demand, that increases in interest rate volatility will increase the demand for money. We then present empirical evidence that the demand for money has been influenced by alterations in the volatility of open market rates using standard specifications of the demand for money.
UR - http://www.scopus.com/inward/record.url?scp=0041660476&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0041660476&partnerID=8YFLogxK
U2 - 10.1016/0304-3932(83)90066-1
DO - 10.1016/0304-3932(83)90066-1
M3 - Article
AN - SCOPUS:0041660476
VL - 12
SP - 475
EP - 482
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
SN - 0304-3932
IS - 3
ER -