| Sumario: | A study was conducted using Varian's (1982) nonparametric technique of demand analysis to establish whether various subgroupings of monetary assets are weakly separable in a fully specified utility function containing goods, services, leisure, and monetary assets and whether commodities/goods are weakly separable in the consumer's utility function. Findings from long-run cointegration analysis, short-run error correction models, and non-nested testing confirmed that relative prices play a role in the money demand function of the personal sector in the U.K., with the relative prices of durables, nondurables, and services appearing to be significant explanatory variables in the long-run money demand specification. In addition, the findings suggested that the conventional money demand specification has a tendency to overestimate the personal sector's speed of adjustment of money holdings in response to disequilibrium.
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