LAUSR.org creates dashboard-style pages of related content for over 1.5 million academic articles. Sign Up to like articles & get recommendations!

Policy uncertainty and the demand for money in the United Kingdom: Are the effects asymmetric?

Photo from wikipedia

Abstract Since the publication of Baker et al. (2016) work on measuring economic policy uncertainty, its impact on other macro variables has received renewed attention and its impact on the demand… Click to show full abstract

Abstract Since the publication of Baker et al. (2016) work on measuring economic policy uncertainty, its impact on other macro variables has received renewed attention and its impact on the demand for money is no exception. A previous study that assessed its impact on the demand for money in the U.K. found short-run but not long-run effects. We suspect that this could be due to assuming the effects of policy uncertainty to be symmetric. Once we assess its asymmetric effects by introducing the nonlinear adjustment of the policy uncertainty measure, we show that, both increased and decreased uncertainty, induce the public in the U.K. to hold more cash in the long run, a clear sign of an asymmetric response.

Keywords: policy uncertainty; policy; demand money; uncertainty

Journal Title: Economic Analysis and Policy
Year Published: 2020

Link to full text (if available)


Share on Social Media:                               Sign Up to like & get
recommendations!

Related content

More Information              News              Social Media              Video              Recommended



                Click one of the above tabs to view related content.