Demand for money: tests of functional forms and stability
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Extending the family of functional forms of demand for money to the quadratic flexible functional family with first-order autoregressive errors, this paper tests several member functions of the family, tests stability of functions over time, and investigates the effect of temporal aggregation level of data. The stability hypothesis is strongly rejected and the acceptable functional form is found to depend on the temporal aggregation level of data. © 1981, Taylor & Francis Group, LLC. All rights reserved.
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