The Stability of Money Demand Function in Five Major Industrial Countries: Evidence from Cointegration Tests
Bibliographic record
Abstract
Using a variety of cointegration tests, this paper examines the existence of long-run equilibrium relationship in the demand function for real M1 money balance and the possibility of structural shift in the relationship in five major industrial countries. The exercise based on the maximum likelihood tests of cointegration offers strong evidence for long run equilibrium in the money demand function with short-term as well as long-term interest rate specifications in the U.S., U.K. and Canada. For Japan, the long-term interest rate specification yields more robust results than those with the short-term interest rate. The tests offer no conclusive evidence about the specification and existence of a stable long-run money demand function for Germany. The exercise also reveals significant cross-country variations in the magnitudes of real income elasticity and interest rate semi-elasticity over the specifications of the money demand function with respect to interest rates. The study offers no evidence of significant structural break in the long-run money demand function. Contrary to the recommendation of some earlier research, the results of this study suggest that the demand function for the narrowly defined monetary aggregate can be used in the formulation of monetary policy in most of the selected countries.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.006 | 0.002 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; both teacher heads agree on what is shown here.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".