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Estimating Monetary Demand Using a Flexible Model of Almost Ideal Demand System(AIDS)
Version 1
: Received: 20 June 2024 / Approved: 24 June 2024 / Online: 24 June 2024 (08:43:35 CEST)
How to cite: Azizi, J.; Jabbari, A. Estimating Monetary Demand Using a Flexible Model of Almost Ideal Demand System(AIDS). Preprints 2024, 2024061596. https://doi.org/10.20944/preprints202406.1596.v1 Azizi, J.; Jabbari, A. Estimating Monetary Demand Using a Flexible Model of Almost Ideal Demand System(AIDS). Preprints 2024, 2024061596. https://doi.org/10.20944/preprints202406.1596.v1
Abstract
Money demand is the amount of real money balance with people and they can decide at any time what part of their assets to keep in cash. In this study, money was assumed to be a durable good that leads to the flow of some kind of service. Therefore, money became a function of utility. Using AIDS elasticity demand function, income, price and cross elasticities were evaluated. The statistics of this study are related to the years 2003-2022. The results showed that, based on the assumption of three goods, the demand includes bills and negotiable instruments, demand deposits, and time deposits. Based on the limitation of symmetry, collectability and homogeneity, the tensions can be calculated. The results showed that the price elasticity of demand for banknotes and muskox with term deposits is not significant. On the other hand, the cross tension between sight deposits and term deposits is negative and significant.
Keywords
Monetary demand function; AIDS; price and non-price elasticity
Subject
Business, Economics and Management, Economics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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