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On Cash-in-Advance Models of Money Demand and Asset Pricing 1. INTRODUCTION A cash-in-advance constraint has become a popular device for introducing money into macroeconomic equilibrium models [see, for example, Clower […]

The Demand for Money in the United States: Evidence from Cointegration Tests Studies of money demand in the United States published during the last decade have not provided overwhelming support […]

This paper compares two approaches to the analysis of economci data: the exclusively econometric approach recommended by Hendry and Ericsson and the more eclestic approach that we employed in our books Monetary History and Monetary Trends. It concludes that the article by Hendry and Ericsson is mislabeled. Their article is not in any relevant sense an evaluation of our 'empirical model of U.K. money demand.' Rather, it uses one equation from our book as a peg on which to hang an exposition of sophisticated econometric techniques. Insofar as their emperical findings do bear on ours, they simply confirm some of our principal results and contradict none.

A model is developed to estimate the share of currency held in transactions and hoarding balances. Transactions balances are derived by comparing the seasonal fluctuations in currency demand and retail sales, with those changes predicted by the Baumol-Tobin inventory approach to money demand. Hoarding balances are found to be the largest and most variable component of total currency demand. Additional support for the model is provided by tests using currency demand by denomination. (Reprinted by permission of the publisher.), The Transactions and Hoarding Demand for Currency Economists have employed a variety of techniques to analyze the demand for currency. Many of these studies have been motivated by the 'mystery' [...]

Research is presented concerning the stable money demand relationship for M2M and MZM during the 1990s. The reallocation of household wealth to mutual funds from time deposits is discussed.

The NBER's Program on Monetary Economics met in Cambridge on April 28. Christopher D. Carroll, NBER and Johns Hopkins University; and Stephen G. Cecchetti, NBER and Ohio State University, organized [...]

Research is presented concerning the difficulties caused by the fluctuation of income in an economy displaying endogenous growth. The role of the money supply and the demand for money are discussed.

A study focused on the differences existing between anticipated monetary policy alteration, unanticipated positive-money change and unanticipated negative-money modification when denoting movement in real output. It was also discovered that an asymmetry in the effects of anticipated expansionary and anticipated contractionary monetary policy on output occurred although the null hypothesis of no asymmetry in stimulative/contractionary policy was unacceptable. The unanticipated expansionary monetary policy produced a significant effect equivalent to the unanticipated contractionary policy.

This paper examines the demand for major financial assets by householders during different stages of their lives using the life-cycle theory of consumption and saving and cross-sectional data from the Survey of Income and Program Participation (SIPP). Unlike most studies on money demand, data used in this study are microeconomic and free from the identification problem frequently encountered in the literature. Regression results show that the propensities to hold financial assets out of labor income, wealth, and net worth differ substantially among young, middle-age, and old householders. Also, the impacts of relative rates of return and demographic variables on asset demands vary among householders of different ages. (Reprinted by permission of the publisher.)

This paper examines the case of interest-bearing notes in the Confederate States of America which were not legal tender, but which were said to circulate. Like other known episodes, the Confederate experiment does not support the legal restrictions theory of the demand for money. There is no evidence that these instruments circulated readily, and some evidence that their limited circulation fell short of that of competing non-interest-bearing notes--characteristics inconsistent with legal restrictions theory. The episode displays other characteristics inconsistent with or not encompassed by the major competing explanations of why interest-bearing notes do not circulate., The legal restrictions theory of the demand for money (henceforth, LR) posits that interest-bearing notes are as suitable for circulation in exchange as non-interest-bearing notes.(1) For any level of asset [...]

The reflux principle can be regarded as the main mechanism by which the deposits arising from bank advances are equated to desired money balances. An investigation of this issue reveals that N. Kaldor's reflux mechanism had been highlighted by Joan Robinson, another key member of the Cambridge School. This mechanism applies when agents reimburse their debt, when they buy bonds from banks and when they purchase bonds from firms and prompt them to issue new securities. It can be argued that post-Keynesians do not really disagree about the relative significance of the reflux mechanism.

Monetary shocks are determined as those that carry a proportionate impact on the shock of money and the price level but sans any long-run effect on output or the interest rate. The response functions generally imply that the monetary shock identified can be construed as a monetary policy shock. An expansionary shock produces a rise in the stock of money, a short-run fall in the interest rate.

This paper investigates the disequilibrium effects of a number of institutional factors on the aggregate money demand behaviour of three Asian economies: Japan, Korea and Singapore. It identifies these institutional factors with strong government interventions through monetary or fiscal policies. The investigation is carried out through progressive model search following the equilibrium-correction modelling (ECM) approach. The findings confirm to the arguments that undesirable empirical results from the ECM procedure, such as residual (unconditional or conditional) heteroscedasticity or coefficient non-constancy, are most probably symptoms of the missing variable problem in the underlying theoretical model, and that extension of the theoretical model accordingly to include certain institutional factors pertaining to the particular economies under investigation can enhance the significance of the empirical studies in a substantial way. Keywords: Disequilibrium; Aggregate money demand; Equilibrium-correction modelling