U.S. narrow money for the twenty-first century

Donald H. Dutkowsky, Barry Z. Cynamon, Barry E. Jones

Research output: Contribution to journalArticle

16 Scopus citations

Abstract

This study focuses on sweep programs in establishing conceptually appropriate and reliable measures of narrow money. We propose the aggregates M1RS = M1 + holdings of funds swept in retail sweep programs, and M1S = M1RS + holdings of funds swept in commercial demand deposit sweep programs. Based on quarterly observations from 1959:1-2002:4, cointegration tests indicate the existence of long-run relationships between the velocity of M1S and the corresponding opportunity cost of holding money, using either short-term or long-term interest rates. Tests find weaker evidence for M1RS and little support for MZM.

Original languageEnglish (US)
Pages (from-to)142-152
Number of pages11
JournalEconomic Inquiry
Volume44
Issue number1
DOIs
StatePublished - Jan 1 2006

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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