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Measurement error and a reinterpretation of the conventional money demand regression

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  • Marvin Goodfriend

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.

Suggested Citation

  • Marvin Goodfriend, 1983. "Measurement error and a reinterpretation of the conventional money demand regression," Working Paper 83-03, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:83-03
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    References listed on IDEAS

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    7. Jared Enzler & Lewis Johnson & John Paulus, 1976. "Some Problems of Money Demand," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1), pages 261-280.
    8. Santomero, Anthony M & Seater, John J, 1981. "Partial Adjustment in the Demand for Money: Theory and Empirics," American Economic Review, American Economic Association, vol. 71(4), pages 566-578, September.
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    Cited by:

    1. V. Vance Roley, 1985. "Money Demand Predictability," NBER Working Papers 1580, National Bureau of Economic Research, Inc.

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    Keywords

    Demand for money;

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