Money demand under free banking: Switzerland 1851–1906

This paper studies money demand in Switzerland under free banking before the establishment of the Swiss National Bank. We find that, in addition to income, the banks’ balance-sheet-to-GDP ratio and the number of banks were important determinants of long-run money demand. The former variable also pla...

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Detalles Bibliográficos
Autores principales: Gerlach, Stefan, Kugler, Peter
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer International Publishing 2018
Materias:
Original Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6214280/
https://www.ncbi.nlm.nih.gov/pubmed/30443510
http://dx.doi.org/10.1186/s41937-017-0013-8
Descripción
Sumario:This paper studies money demand in Switzerland under free banking before the establishment of the Swiss National Bank. We find that, in addition to income, the banks’ balance-sheet-to-GDP ratio and the number of banks were important determinants of long-run money demand. The former variable also played an important role in the monetary adjustment process. We also detect a strong positive long-run impact of real income on the bank’s balance-sheet-total-to-GDP ratio and a strong long-run influence of real income and the interest rate spread on the number of banks.

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