Working Paper

Measurement error and a reinterpretation of the conventional money demand regression


Abstract: It has been sixteen years since a partial adjustment model was first applied in empirical money demand studies by Chow [1996]. Since then the partial adjustment specification has become widely used, particularly in quarterly money demand studies. However, in spite of its widespread use, the theoretical rationalization for the partial adjustment specification has never been entirely satisfactory.

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Provider: Federal Reserve Bank of Richmond

Part of Series: Working Paper

Publication Date: 1983

Number: 83-03