TY - JOUR
T1 - Stochastic trends in the long-run behavior of velocity
T2 - A new test of the institutional hypothesis
AU - Arnold, Ivo J.M.
PY - 1996/12
Y1 - 1996/12
N2 - The institutional approach to the long-run behavior of velocity has been implemented through testing whether proxy variables for the process of monetization, the spread of commercial banking, the level of financial sophistication, and economic stability are related to movements in velocity. In this paper I argue that a valid test of this type requires that a distinction is made between trends and temporary fluctuations in velocity and the institutional proxies. When this distinction is taken into account, it appears that the long-run behavior of velocity is less easily explained by the institutional variables than previous tests suggested.
AB - The institutional approach to the long-run behavior of velocity has been implemented through testing whether proxy variables for the process of monetization, the spread of commercial banking, the level of financial sophistication, and economic stability are related to movements in velocity. In this paper I argue that a valid test of this type requires that a distinction is made between trends and temporary fluctuations in velocity and the institutional proxies. When this distinction is taken into account, it appears that the long-run behavior of velocity is less easily explained by the institutional variables than previous tests suggested.
UR - http://www.scopus.com/inward/record.url?scp=0030527283&partnerID=8YFLogxK
U2 - 10.1016/S0161-8938(95)00137-9
DO - 10.1016/S0161-8938(95)00137-9
M3 - Article
AN - SCOPUS:0030527283
SN - 0161-8938
VL - 18
SP - 643
EP - 688
JO - Journal of Policy Modeling
JF - Journal of Policy Modeling
IS - 6
ER -