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Applied Monetary Demand Analysis

  • Apostolos Serletis

Abstract

In this chapter we consider and illustrate a solution to the inter-related problems of monetary aggregation and estimation of money demand functions. In doing so, we use quarterly U.S. data and take a demand systems approach. We handle the problem in three stages: (i) we apply revealed preference tests to determine admissible and separable components; (ii) we aggregate these components using a superlative index — the Divisia index; and (iii) we use the basic translog demand system to deal with the problem of money demand.

Keywords

Money Demand Demand System User Cost Monetary Aggregate Budget Share 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 1.
    Notice that in the data set available by the Federal Reserve Bank of St. Louis, Super NOW accounts are reported separately from other checkable deposits for the period 1983:1–1985:4 — after 1985, they are included in other checkable deposits. Because the NONPAR tests can only be performed over a constant number of assets, for the period 1983:1–1985:4 we included (using a simple summation) Super NOW accounts in other checkable deposits and calculated the relevant user cost series as a weighted average. We did the same with money market deposit accounts (at commercial banks and thrifts) which for the 1982:4–1991:2 period are reported separately from savings deposits.Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Apostolos Serletis
    • 1
  1. 1.University of CalgaryCanada

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