Atlantic Economic Journal

, Volume 15, Issue 4, pp 16–21 | Cite as

Inconsistency in correcting for serial correlation in money-demand models

  • Joseph Aschheim
  • George S. Tavlas


Our results demonstrate that none of the estimated coefficients obtained by applying the Cochrane-Orcutt technique to partial-adjustment money-demand models is dependable: each of the parameter estimates is inconsistent. The estimated coefficients of the explanatory variables will be biased even in large samples and can thus lead to misleading inferences about the income and interest-rate elasticities of the demand for money.


Parameter Estimate Explanatory Variable International Economic Public Finance Serial Correlation 
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Copyright information

© Atlantic Economic Society 1987

Authors and Affiliations

  • Joseph Aschheim
    • 1
  • George S. Tavlas
    • 2
  1. 1.The George Washington UniversityUSA
  2. 2.International Monetary FundUSA

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