Abstract
The convention in economics is to assume that what is termed the money stock—currency plus checkable deposits—is a variable which is exogenously controlled by the monetary authorities. This assumption makes it possible to assert that a change in one or more economic variables, including the short-term interest rate, influences the “demand” for money. It is on this basis that a demand curve for money is usually specified and, if the study is an empirical one, the parameters of that money-demand equation estimated.
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Forman, L., Groves, M., Eichner, A.S. (1985). The Demand Curve for Money Further Considered. In: Jarsulic, M. (eds) Money and Macro Policy. Recent Economic Thought Series, vol 5. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7715-1_2
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DOI: https://doi.org/10.1007/978-94-015-7715-1_2
Publisher Name: Springer, Dordrecht
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