HOUSEHOLD DEMAND FOR ASSETS: A MODEL OF SHORT-RUN ADJUSTMENTS.
This paper reports an attempt to develop a complete set of asset-demand functions for the household sector and to present estimates of the parameters derived from postwar U.S. data. This approach contrasts with the usual treatment of the demand for consumer goods in which complete systems of equatio...
| Published in: | Review of Economics & Statistics Vol. 52; no. 3; pp. 236 - 242 |
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| Format: | Article |
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MIT Press
Aug70
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | This paper reports an attempt to develop a complete set of asset-demand functions for the household sector and to present estimates of the parameters derived from postwar U.S. data. This approach contrasts with the usual treatment of the demand for consumer goods in which complete systems of equations are estimated. The demand function presented is perfectly general. For purposes of empirical estimation certain assumptions are required as to the nature of this function. These are similar to those used in previous studies and no attempt is made to justify them in detail. All dollar variables are expressed at constant prices. The demand for assets is homogeneous of degree zero in the general price level and unit-elastic with respect to population. The form of the function is linear in the logarithms of the variables. Ample evidence has been found in support of the general proposition that asset adjustments are not made independently but rather that in most cases they are competitive processes. Of the twelve cross-adjustment parameters in the model, six are significantly different from zero. |
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