Friedman and Schwartz (1982) Revisited: Assessing Annual and Phase-Average Models of Money Demand in the United Kingdom
Posted: 8 Sep 1998
Several studies have developed empirical models of U.K. money demand using the century of annual and phase-average data in Friedman and Schwartz (1982). The current paper evaluates key models from those studies, employing tests of constancy and encompassing. The evidence strongly favors an annual model from Ericsson, Hendry, and Prestwich (1998a), whereas models based on the phase-average data fare poorly.
JEL Classification: E41, C52
Suggested Citation: Suggested Citation