This important new text aims to make Buffer Stock theory accessible to undergraduate and post graduate students. The book is split into two parts, an examination of the nature of the buffer stock model of the demand for money and an empirical investigation of one particular model on UK data. The concept of a buffer stock is explained with reference to other economic samples, and a survey is made of the nature of the many types of buffer stock model. The econometric performance of the buffer stock model is evaluated using aggregate and sectoral data for the UK economy. The book should be used by anyone wishing to understand this important new development.