The Demand for Money

Almost half a century has elapsed since the demand for money began to attract widespread attention from economists and econometricians, and it has been a topic of ongoing controversy and research ever since. Interest in the topic stemmed from three principal sources. Firstofall,therewasthematter oftheinternaldynamicsofmacr- conomics, to which Harry Johnson drew attention in his 1971 Ely Lecture on The Keynesian Revolution and the Monetarist Counter- Revolution, American Economic Review 61 (May 1971). The main lesson about money that had been drawn from the so-called Key- sian Revolution was rightly or wrongly that it didn't matter all that much. The inherited wisdom that undergraduates absorbed in the 1950s was that macroeconomics was above all about the determination of income and employment, that the critical factors here were saving and investment decisions, and that monetary factors, to the extent that they mattered at all, only had an in?uence on these all important variables through a rather narrow range of market interest rates. C- ventional wisdom never goes unchallenged in economics, except where its creators manage to control access to graduate schools and the jo- nals,anditiswithnocynicalintentthatIcon?rmJohnson'ssuggestion that those of us who embarked on academic careers in the '60s found in this wisdom a ready-made target.

Increased coverage of theoretical and empirical approaches to the demand for money, including a new chapter on cross-country evidence A new chapter on money demand issues and estimation of the welfare cost of inflation using tools from public finance and applied microeconomics A new chapter on rational expectations macroeconomics and issues such as the Lucas critique, rules versus discretion in monetary policymaking, and time inconsistency Increased coverage of the univariate and multivariate properties of the money demand variables, nonlinear chaotic dynamics, and self-organized criticality Revised coverage of monetary asset demand systems based on locally flexible functional forms such as the translog, generalized Leontief, almost ideal demand system, Minflex Laurent, and the Normalized Quadratic reciprocal indirect utility function Revised coverage of monetary asset demand systems based on globally flexible functional forms such as the Fourier and the Asymptotically Ideal Model Increased coverage of the econometrics of demand systems highlighting the challenge inherent with achieving both economic and econometric regularity A chapter with suggestions for potentially productive future research Includes supplementary material: sn.pub/extras

Auteur

Apostolos Serletis is University Professor and Professor of Economics and Finance at the University of Calgary. Since receiving his Ph.D. from McMaster University in 1984, he has held visiting appointments at the University of Texas at Austin, the Athens University of Economics and Business, and the Research Department of the Federal Reserve Bank of St. Louis.

Professor Serletis' teaching and research focus on monetary and financial economics, macroeconometrics, and nonlinear and complex dynamics. He is the author of eight books, including The Theory of Monetary Aggregation, co-edited with William A. Barnett (Elsevier 2000), Financial Markets and Institutions: First Canadian Edition, with Frederic S. Mishkin and Stanley G. Eakins (Addison Wesley 2004), Money and the Economy (World Scientific 2006), The Economics of Money, Banking, and Financial Markets: Third Canadian Edition, with Frederic S. Mishkin (Addison Wesley 2007), Functional Structure Inference, co-edited with William A. Barnett (Elsevier 2007), and Quantitative and Empirical Analysis of Energy Markets (World Scientific 2007).

In addition, he has published close to 150 articles in such journals as the Journal of Economic Literature, the Journal of Monetary Economics, the Journal of Money, Credit and Banking, the Journal of Econometrics, the Canadian Journal of Economics, the Journal of Economic Dynamics and Control, the Journal of Business and Economic Statistics, the Journal of Banking and Finance, the Journal of Applied Econometrics, and Macroeconomic Dynamics.

Professor Serletis is an Associate Editor of Macroeconomic Dynamics and a member of the editorial board at two academic journals, the Journal of Economic Asymmetries and the Journal of Economic Studies. He lives in Calgary, with his wife Aglaia.

Contenu
Static Monetary Macroeconomics.- Classical Macroeconomic Theory.- Keynesian Macroeconomic Theory.- Dynamic Monetary Macroeconomics.- Models with Rational Expectations.- Neoclassical Growth Theory.- Monetary Growth Theory.- The Welfare Cost of Inflation.- Theoretical Approaches to the Demand for Money.- The Classics, Keynes, and Friedman.- Transactions Theories of Money Demand.- Portfolio Theories of Money Demand.- Empirical Approaches to the Demand for Money.- Conventional Demand for Money Functions.- Modeling Trends in the Variables of the Money Demand Function.- Cointegration and the Aggregate Demand for Money Function.- Balanced Growth, the Demand for Money, and Monetary Aggregation.- Cross-Country Evidence on the Demand for Money.- Microfoundations and Monetary Aggregation.- The Microeconomic Foundations of the Definition of Money.- The New Monetary Aggregates.- Nominal Stylized Facts.- Microfoundations and the Demand for Money.- The Nonparametric Approach to Demand Analysis.- The Parametric Approach to the Demand for Monetary Assets.- Locally Flexible Functional Forms and Demand Systems.- Globally Flexible Functional Forms and Demand Systems.- Microeconometrics and the Demand for Money.- The Econometrics of Demand Systems.- Applied Monetary Demand Analysis.- Future Research Agenda.