What Shifts Money Demand?The main shift factor for real Md is income (Y).
Additional shift factors include:
Interest paid on money: If money pays more interest (which was not possible before 1978), Md rises
Wealth: If people become wealthier, some of the additional wealth may be held as money, so Md rises.
Expected future inflation: If people expect P to rise quickly in the future, they will try to hold as little money as possible.
Payment technologies: Any technological development that alters how people pay for goods and services, or the ease of switching between money and non-money assets can change Md
Examples: Credit Cards and ATMs