Estimating the Demand for Money in the Russian Economy Factoring in the Development of Banking Technologies

12 Pages Posted: 19 Feb 2014

Date Written: February 18, 2014

Abstract

This paper presents an attempt to find a stable cash demand function in Russia in the period of 2000 thru 2010. The authors assume that the demand for the М0 monetary aggregate in Russia has recently been substantially influenced by the advancement of payment innovations, namely bank payment cards. Traditional money demand models can’t explain how innovations influence the demand for money. Therefore, this paper presents a modern monetary theory approach towards the “money” issue which can explain the existence of a wide range of payment instruments, i.e., innovations. Additionally, the paper presents the results of estimations of equations of the demand for the М0 monetary aggregate factoring in indicators of payment innovations.

Keywords: Russian economy. money demand, banking technologies

JEL Classification: E5

Suggested Citation

Sinelnikova-Muryleva, Elena, Estimating the Demand for Money in the Russian Economy Factoring in the Development of Banking Technologies (February 18, 2014). Available at SSRN: https://ssrn.com/abstract=2398070 or http://dx.doi.org/10.2139/ssrn.2398070

Elena Sinelnikova-Muryleva (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny per 3-5
Moscow, 125993
Russia

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