Abstract
This article examines whether there are significant differences in the speed of adjustment of the actual to the desired money stock among major industrialized countries. Demand for money functions, including a partial adjustment hypothesis, were estimated for the United States, United Kingdom, Canada, Germany, France and Japan essentially over the period 1960–1976. The functions were tested for stability and found to be stable in most cases. The estimations show that, mainly with the exception of Germany and the United Kingdom for broad money, the speed of adjustment is relatively high. These results tend to support monetarist views. The statistical test for differences in the speed of adjustment revealed that only a few significant differences exist when narrow money is used. When broad money is used, howeever, the United Kingdom and Germany are shown to have significantly slower speeds of adjustment than almost all the other countries.
Published Version
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