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Household‐Sector Money Demand For The Uk

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

Abstract

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.

Suggested Citation

  • Rakesh K. Bissoondeeal & Barry E. Jones & Jane M. Binner & Andrew W. Mullineux, 2010. "Household‐Sector Money Demand For The Uk," Manchester School, University of Manchester, vol. 78(s1), pages 90-113, September.
    • Handle: RePEc:bla:manchs:v:78:y:2010:i:s1:p:90-113
    DOI: 10.1111/j.1467-9957.2010.02207.x
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    Cited by:

    1. Bissoondeeal, Rakesh K. & Karoglou, Michail & Binner, Jane M., 2019. "Structural changes and the role of monetary aggregates in the UK," Journal of Financial Stability, Elsevier, vol. 42(C), pages 100-107.
    2. John Ashworth & David Barlow & Lynne Evans, 2014. "Sectoral Money Demand Behaviour and the Welfare Cost of Inflation in the UK," Manchester School, University of Manchester, vol. 82(6), pages 732-750, December.
    3. Belongia, Michael T. & Ireland, Peter N., 2014. "The Barnett critique after three decades: A New Keynesian analysis," Journal of Econometrics, Elsevier, vol. 183(1), pages 5-21.
    4. Mehmet Ezer, 2019. "Do Monetary Aggregates Belong In A Monetary Model? Evidence From The Uk," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 22(4), pages 509-530, December.
    5. Richard G. Anderson & Barry E. Jones, 2011. "A comprehensive revision of the U.S. monetary services (divisia) indexes," Review, Federal Reserve Bank of St. Louis, vol. 93(Sep), pages 325-360.
    6. Jane M. Binner & logan J. Kelly, 2017. "Modelling Money Shocks in a Small Open Economy: The Case of Taiwan," Manchester School, University of Manchester, vol. 85, pages 104-120, September.
    7. Barlow, David, 2023. "The stability of UK households Divisia money balances," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 451-459.
    8. Rakesh Bissoondeeal & Michail Karoglou & Andy Mullineux, 2014. "Breaks in the UK Household Sector Money Demand Function," Manchester School, University of Manchester, vol. 82, pages 47-68, December.

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