The purpose of this paper will be to analyze the significance of the effects current payment technologies have had on money supply and demand, and their determinants (the interest rate and income). Specific attention will be given to M1 and M2 stocks and velocities, the Fed Funds Rate and National Income, and how their interaction with each other has been affected by technology development. Using Electronic Funds Transfer and Automated Teller Machine introduction as a proxy for current technological development in a cointegration test model, it is found that current payment technologies have had mixed effects on money supply and demand, and the interaction between their associated factors within the IS-LM framework.
Recommended CitationHolly, Patrick Jr. '99 (1999) "The Effect of Technology Growth on Money Supply and Demand: A Cointegration Approach," The Park Place Economist: Vol. 7
Available at: http://digitalcommons.iwu.edu/parkplace/vol7/iss1/17