SFB 303 Discussion Paper No. A - 44
Author: von Hagen, Jürgen, and Manfred J. M. Neumann
Title: Instability versus Dynamics: A Study in West German Demand for Money
Abstract: This study presents extensive empirical evidence in favor of a stable money demand function in Germany,
over the period 1964-1984, tested against a variety of alternatives. Previous instability results are likely to stem
from the conventional research strategy of straightforwardly estimating a level-cum-stock-adjustment model.
The research strategy of this paper, in contrast, has been to carefully single out an acceptable statistical
representation of the data generating process by testing the validity of restrictions on it introduced to the
specification of the empirical models.
Creation-Date: February 1986
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