Precautionary Balances and the Velocity of Circulation of Money
用搜索模型解释家庭因不确定支出而持有预防性货币余额，导致货币流通速度低且对利率敏感，并用美国1892-2004年数据验证，发现样本末期预防性余额大幅下降，对政策有重要启示。
The low velocity of circulation of money implies that households hold more money than they normally spend. This behavior is explained if households face uncertain expenditure needs, so that they have a precautionary motive for holding money. We investigate this motive in a search model where households are subject to preference shocks. The model predicts that velocity is not only low but also interest elastic. The model closely fits U.S. data on velocity and interest rates (1892–2004). The empirical analysis reveals a dramatic reduction in precautionary balances toward the end of our sample, which is important for policy issues.