Money demand varies across countries, impacting inflation and GDP dynamics.
The article examines money demand in the euro area, the US, and the UK using different methods. The linear model shows that money demand is positively related to income and negatively related to interest rates. The quantile regression method reveals that the sensitivity of money demand to inflation is higher when real money holdings are low. The smooth transition model indicates that the elasticity of money demand varies based on economic conditions and differs between countries.