An Analysis Of The Interest Elasticity Of Financial Asset Holdings By Income

@inproceedings{Amick2011AnAO,
  title={An Analysis Of The Interest Elasticity Of Financial Asset Holdings By Income},
  author={Brian Amick and James McGibany},
  year={2011}
}
A Keynesian money demand model is used to examine the interest elasticity of financial asset holdings by income level. In this model, once an individual receives income, they first make transactions, and any leftover income goes for speculative purposes. Since only speculative balances are assumed to change with interest rates, individuals with income used mainly for transactions purposes are theorized to have asset holdings that are unresponsive to interest rates, while higher income… CONTINUE READING

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