Hawtrey analysed the demand for money in terms of motives. He identifies a transaction demand, a precautionary demand, and a residual demand which reflects a gradual accumulation of savings balances. He thinks agents as saving gradually but investing only larger sums periodically. In the meantime these short-hoards act as a buffer stock. The interest forgone is the main costs of holding money balances, and thus he points to a balancing process between costs and advantages in determining desired balances. The introduction of a banking system into the model allows agents to substitute borrowing power for money balances (Hawtrey, 1919, pp. 36–7).