Is Long-Run M1 Demand Stable? Public Deposited

Creator Series Issue number
  • 529
Date Created
  • 1994-06
Abstract
  • The money demand literature presents much conflicting evidence on this question. For example, Lucas (1988) reports unrestricted money demand regressions which seem to imply that long-run money demand elasticities are highly unstable across subsamples. At the same time, he also presents evidence from money demand regressions with the income elasticity restricted to unity which seem to suggest stability. We conduct a formal analysis which weighs these apparently conflicting facts to determine which hypothesis is more plausible; the hypothesis that money demand is stable, or the hypothesis that money demand is unstable. We find that the stability hypothesis is the more plausible one. Thus, according to our data set, the answer to the question in the title is "yes".

Subject (JEL) Mot-clé Alternative title
  • The stability of M1 demand : a preliminary investigation / R. Anton Braun, Lawrence J. Christiano.
Date Modified
  • 08/27/2019
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
Publisher
  • Federal Reserve Bank of Minneapolis
Resource type DOI
License

Des relations

Dans Collection:
Dernière modification

Contenu téléchargeable

Télécharger le fichier PDF

Zipped Files

Download a zip file that contains all the files in this work.

Articles