A new hypothesis on the demand for money: the 'accounting' motive and banks' costs November 9, 1992

摘要

After identifying and defending the concepts of money and the demand for it used in this paper, it is argued that the heavy cost of maintaining checking accounts is not reasonably explained by the conventional listing of motivations, especially in the case of large deposits. Data presented indicate that the bulk of demand deposits is in such deposits. An important and unique service rendered by banks is the provision of an essential element in the bookkeeping of the economy. This is costly and banks must insist on the whole that balances be sufficiently large so that their use will cover these costs.