The value of time and recent U.S. money demand instability.
Most studies of U.S. money demand have failed to estimate a stable money demand function for the past two decades, but they typically neglect “value of time” as a determinant of money demand. If money saves transaction time, it increases the consumer's leisure time, which is valued at the wage rat...
| Published in: | Southern Economic Journal Vol. 60; pp. 564 - 579 |
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| Main Authors: | , |
| Format: | Article |
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Southern Economic Association
January 1994
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=512358500&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 512358500 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: January 1994 vid: 60 pid: 1482 pub: Southern Economic Association artinfo: ui: 512358500 10.2307/1060567 ppf: 564 ppct: 15 formats: tig: atl: The value of time and recent U.S. money demand instability. aug: au: Arize, Augustine C. Darrat, Ali F. su: Time & economic reactions Mathematical models of economics Demand for money Money Mathematical models United States sug: subj: United States Time & economic reactions Mathematical models of economics Demand for money Money Mathematical models ab: Most studies of U.S. money demand have failed to estimate a stable money demand function for the past two decades, but they typically neglect “value of time” as a determinant of money demand. If money saves transaction time, it increases the consumer's leisure time, which is valued at the wage rate. A new study estimated M2 money demand using quarterly data for the period 1963:1-1991:4. Regression results show that wages, as a proxy for the value of time, have a highly significant positive effect on money demand. Moreover, structural stability of the money demand equation requires the inclusion of the wage variable. Without it, the equation is seriously misspecified. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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