The demand for financial assets: Time series evidence for The Netherlands: 1963:II 1975:IV

This paper provides a systems approach to a set of four demand-for-liquid-assets equations in The Netherlands, using quarterly data over the period 1963 1975. The main findings are firstly: the estimated cross-elasticity of time and savings deposits reveals complementarity, and secondly: cyclical shifts in the demand equations are particularly evident in time and savings deposits. This indicates that the velocity of circulation for these assets varies with the level of economic activity, while it does not vary for the two other assets considered ‘money’ and ‘other near moneys’.