{
  "title": "Currency Substitution and Cross-Border Monetary Aggregation: Evidence From the G-7",
  "publication": "IMF Working Papers, October 1, 1992",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/currency-substitution-and-cross-border-monetary-aggregation-evidence-from-the-g-7-832",
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  "summary": "Is there a stable aggregate money demand relationship for Europe? If so, why, and if not, why not? These questions are important for the implementation of policy by a European central bank, as well as for the appropriate speed of transition to EMU.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Research focus: Whether there is a stable aggregate money demand relationship for Europe; if so, why, and if not, why not.\n- Policy relevance: Implications for implementation of policy by a European central bank and for the appropriate speed of transition to EMU.\n- Study design: Multi-country empirical study of money demand for the G-7 countries during the period since 1973.\n- Core empirical aims:\n  - Look for evidence of currency substitution.\n  - Test the restrictions implied by cross-border aggregation within Europe."
    },
    {
      "heading": "Research questions and scope",
      "content": "- Primary questions:\n  - Is there a stable aggregate money demand relationship for Europe?\n  - What explains stability or instability in such a relationship?\n- Geographic and temporal scope:\n  - G-7 countries.\n  - Period covered: since 1973."
    },
    {
      "heading": "Methods and analytical approach",
      "content": "- Type of analysis: Multi-country empirical study of money demand.\n- Specific empirical focuses (as indicated by keywords):\n  - Testing aggregate equation and aggregation restriction.\n  - Cross-equation restriction and testing equation procedures.\n  - Use of dynamic error correction equation and analysis of error correction variable.\n  - Examination of currency substitutability and currency substitution.\n- Related technical elements highlighted in keywords:\n  - Canada equation, non-European equation, critical value, test statistic, equation result."
    },
    {
      "heading": "Key themes, subjects, and keywords",
      "content": "- Subjects listed:\n  - Currencies, Demand for money, Dollarization, Exchange rates, Foreign exchange, Monetary policy, Money, National accounts, Personal income\n- Keywords (indicative of methods and focal points):\n  - aggregate equation, aggregation restriction, Canada equation, critical value, cross-equation restriction, Currencies, currency substitutability, currency substitution, Demand for money, Dollarization, dynamic error correction equation, equation result, error correction variable, Europe, Exchange rates, money demand equation, non-European equation, Personal income, test statistic, testing equation, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/currency-substitution-and-cross-border-monetary-aggregation-evidence-from-the-g-7-832"
    }
  ],
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    "Authors: Timothy D. Lane, Stephen S. Poloz",
    "Published: October 1, 1992",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451955040.001",
    "Research focus: Whether there is a stable aggregate money demand relationship for Europe; if so, why, and if not, why not.",
    "Policy relevance: Implications for implementation of policy by a European central bank and for the appropriate speed of transition to EMU.",
    "Study design: Multi-country empirical study of money demand for the G-7 countries during the period since 1973.",
    "Core empirical aims:",
    "Primary questions:",
    "Geographic and temporal scope:",
    "Type of analysis: Multi-country empirical study of money demand.",
    "Specific empirical focuses (as indicated by keywords):",
    "Related technical elements highlighted in keywords:",
    "Subjects listed:",
    "Keywords (indicative of methods and focal points):"
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