The demand for money in the United Kingdom - experience since 1971

Quarterly Bulletin 1974 Q3
Published on 01 September 1974

A research paper, prepared in the Bank's Economic Section, largely by Graham Hacche.

The Economic Section of the Bank has for some time been engaged in the econometric estimation of demand-for-money relationships in the United Kingdom. In a previous paper. Goodhart and Crockett reviewed some published results, and presented their own estimates, based on quarterly data. In a further paper. Price examined more closely the lag structures of the relationships, and presented for the first time equations for the demand for broadly-defined money by the company and personal sectors separately. He concluded from his results that 'equations of the types described provide a sufficiently accurate statistical explanation of past movements in the stock of money to be a useful guide for monetary policy.'

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