Abstract
THE QUESTION OF which functional forms of money demand regression equations are useful for empirical work is addressed here. Specifically, it is argued that a functional form that focuses attention on the ability of the growth rate of nominal money to predict the inflation rate is a useful way of summarizing empirical evidence on the existence of a stable money demand function. The results of estimating and simulating this functional form as well as standard functional forms are presented in the final part of this paper. A typical equation expressing the public's demand for real money balances (m) is as follows:
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
