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Household-Sector Money Demand For The Uk

  • RAKESH K. BISSOONDEEAL
  • BARRY E. JONES
  • JANE M. BINNER
  • ANDREW W. MULLINEUX

We test for the existence of a long-run money demand relationship for the UK involving household-sector Divisia and simple sum monetary indexes for the period from 1977 to 2008. We construct our Divisia index using non-break-adjusted levels and break-adjusted flows following the Bank of England. We test for cointegration between the real Divisia and simple sum indexes, their corresponding opportunity cost measures, real income and real share prices. Our results support the existence of a long-run money demand relationship for both the Divisia and simple sum indexes. Copyright © 2010 The Authors. Journal compilation © 2010 Blackwell Publishing Ltd and The University of Manchester.

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Article provided by University of Manchester in its journal The Manchester School.

Volume (Year): 78 (2010)
Issue (Month): s1 (09)
Pages: 90-113

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Handle: RePEc:bla:manchs:v:78:y:2010:i:s1:p:90-113
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