Financial Innovations and Money Demand


OKTAYER A.

MALIYE DERGISI, vol.72, no.160, pp.153-158, 2011 (Journal Indexed in ESCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 72 Issue: 160
  • Publication Date: 2011
  • Title of Journal : MALIYE DERGISI
  • Page Numbers: pp.153-158
  • Keywords: Financial Innovations, Credit Cards, Money Demand, Income Elasticity, Interest Rate Elasticity, Turkey

Abstract

This paper investigates the long-run relationship between financial innovations and money demand by using quarterly data of Turkey for the period 1991.1-2010.4 and by applying cointegration and vector error correction mechanism. The results of the empirical evidence show that there exist a long-run relationship between both indicators of money demand used in the models and financial innovations. The impact of financial innovations on money in circulation, however, is bigger than the impact on M1.