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HOUSEHOLD‐SECTOR MONEY DEMAND FOR THE UK
Author(s) -
BISSOONDEEAL RAKESH K.,
JONES BARRY E.,
BINNER JANE M.,
MULLINEUX ANDREW W.
Publication year - 2010
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2010.02207.x
Subject(s) - divisia index , divisia monetary aggregates index , economics , cointegration , aggregate demand , econometrics , demand for money , monetary economics , index (typography) , aggregate (composite) , broad money , macroeconomics , monetary policy , central bank , quantitative easing , statistics , mathematics , world wide web , computer science , energy (signal processing) , energy intensity , materials science , composite material
We test for the existence of a long‐run money demand relationship for the UK involving household‐sector Divisia and simple sum monetary indexes for the period from 1977 to 2008. We construct our Divisia index using non‐break‐adjusted levels and break‐adjusted flows following the Bank of England. We test for cointegration between the real Divisia and simple sum indexes, their corresponding opportunity cost measures, real income and real share prices. Our results support the existence of a long‐run money demand relationship for both the Divisia and simple sum indexes.