Economic Review

1991

 
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May/Jun, 1991

An Error-Correction Model of U.S. M2 Demand

Yash P. Mehra

An error-correction model is used to study the long- and short-run determinants of U.S. demand for M2. The money demand function presented here exhibits parameter stability and predicts quite well the actual behavior of M2 growth in the 1980s.



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