Non-Linear Equilibrium Correction in Us Real Money Balances, 1869-1997

31 Pages Posted: 9 Apr 2002

See all articles by David A. Peel

David A. Peel

Lancaster University - Management School

Lucio Sarno

City University London - Sir John Cass Business School; Centre for Economic Policy Research (CEPR)

Mark P. Taylor

Washington University in St. Louis - John M. Olin Business School; Centre for Economic Policy Research (CEPR)

Date Written: March 2002

Abstract

Several theoretical models of money demand imply non-linear functional forms for the aggregate demand for money characterized by smooth adjustment towards long-run equilibrium. In this Paper, we propose a non-linear equilibrium correction model of US money demand, which is shown to be stable over the sample period from 1869 to 1997.

Keywords: Demand for money, adjustment costs, equilibrium correction, non-linear dynamics

JEL Classification: E41

Suggested Citation

Peel, David Alan and Sarno, Lucio and Taylor, Mark Peter, Non-Linear Equilibrium Correction in Us Real Money Balances, 1869-1997 (March 2002). CEPR Discussion Paper No. 3249. Available at SSRN: https://ssrn.com/abstract=306765

David Alan Peel (Contact Author)

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom
+44 (0)1524 593590 (Phone)
+44 (0)1524 594244 (Fax)

HOME PAGE: http://www.lancs.ac.uk/staff/peeld/

Lucio Sarno

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mark Peter Taylor

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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