A Closer Look at Long-run U.S. Money Demand: Linear or Nonlinear Error-Correction with M0, M1, or M2?

We study annual U. S. data from 1869 or 1900 to 1999. We find evidence for a well-specified and stable model of money demand with data from 1946 to 1999. We carry out diagnostic and stability tests, including linearity tests. A linear error-correction model with the monetary base performs better tha...

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Publicado en:Economic Inquiry Vol. 45; no. 2; pp. 363 - 377
Autores principales: Haug, Alfred A., Tam, Julie
Formato: Artículo
Publicado: Wiley-Blackwell April 2007
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: A Closer Look at Long-run U.S. Money Demand: Linear or Nonlinear Error-Correction with M0, M1, or M2?
      aug:
        au:
          Haug, Alfred A.
          Tam, Julie
      su:
        Demand for money
        Mathematical models of economics
        History of money
      sug:
        subj:
          Demand for money
          Mathematical models of economics
          History of money
      ab: We study annual U. S. data from 1869 or 1900 to 1999. We find evidence for a well-specified and stable model of money demand with data from 1946 to 1999. We carry out diagnostic and stability tests, including linearity tests. A linear error-correction model with the monetary base performs better than a model with Ml. A specification with M2 is not supported. We use real gross national product as the scale variable and a short-term interest rate as the opportunity cost measure. We estimate an income elasticity of 0.86 and an interest rate elasticity of-0.44 for the monetary base (JEL E41) Reprinted by permission of the publisher.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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