Lecture Money, Banking & Finance - Lecture 5: The Micro-foundations of the Demand for Money - Part 2. The following will be discussed in this chapter: State the general conditions for an interior solution for a risk averse utility maximising agent; Show that the quadratic utility function does not meet all these conditions; Examine the demand for money based on transactions costs; Examine the precautionary demand for money; Examine buffer stock model of money. |