The stability of long-run money demand in five industrial countries

Dennis Hoffman, Robert H. Rasche, Margie A. Tieslau

Research output: Contribution to journalArticlepeer-review

99 Scopus citations


This study provides strong evidence for the stability of long-run demand functions for narrowly defined money (M1) in five industrial countries (U.S., Japan, Canada, U.K., and West Germany) using post-war quarterly data. Evidence of stability is examined using two different estimation techniques and through a formal test of parameter constancy designed specifically for cointegrating vectors. In the majority of these countries, the key to stability is the imposition of a unitary long-run income elasticity that is rarely rejected by the data.

Original languageEnglish (US)
Pages (from-to)317-339
Number of pages23
JournalJournal of Monetary Economics
Issue number2
StatePublished - Apr 1995


  • Cointegration
  • Equilibrium money demand
  • Velocity

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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