TY  - JOUR
AU  - Ball,Laurence
TI  - Short-Run Money Demand
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9235
PY  - 2002
Y2  - September 2002
UR  - http://www.nber.org/papers/w9235
L1  - http://www.nber.org/papers/w9235.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu
AB  - The paper estimates a long-run demand function for M1, using U.S. data for 1959-1993.  This paper interprets deviations from this long-run relation with Goldfeld's partial adjustment model.  A key innovation is the choice of the interest rate in the money demand function.  Most previous work uses a short-term market rate, but this paper uses the average return on  near monies' close substitutes for M1 such as savings accounts and money market mutual funds.  This approach yields a predicted path of M1 velocity that closely matches the data.  The volatility of velocity after 1980 is explained by volatility in the returns on near monies.
ER  -