Abstract
Recent developments in the field of econometrics - in particular, cointegration theory that permits more sophisticated examination of the relationship between non-stationary time-series, are used to analyse the long-run relationship between money and stock prices in the United States. Two recently developed techniques are used to test for cointegration: the Engle and Granger two-step approach as well as Johansen's maximum likelihood approach. It is found that money and stock prices do not cointegrate - a result consistent with the efficient markets hypothesis.
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