Microfoundations for a stable demand for money function
Article Abstract:
An evaluation of the proposals of economists to reinstitute monetary theory is based on sound microeconomic principles which may be effective in establishing monetary theory determinants. An analysis of the circumstances surrounding the breakdown of monetary theory reveals that the buffer stock model for money was successful in rescuing the monetary theory because of its relatively sound microeconomic foundations and the proposed measures for redeeming the monetary theory are based on the same principles.
Publication Name: Economic Journal
Subject: Economics
ISSN: 0013-0133
Year: 1997
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Which road leads to stable money demand?
Article Abstract:
Monetary theory has been greatly affected by works suggesting different approaches to measuring money demand and variations in measurement have led to the breakdown of monetary theory. Money demand can be approached in two ways, which include the so-called low road and high road. The high road, which is based on microeconomic theory including consumer theory, firm theory and index number theory, is considered the most accurate approach in modelling money demand.
Publication Name: Economic Journal
Subject: Economics
ISSN: 0013-0133
Year: 1997
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Microfoundations and the demand for money
Article Abstract:
An analysis of the circumstances surrounding the breakdown of monetary theory regarding money demand reveals that the process of discovery is unpredictable in that there is no way of preparing for the shift in monetary theory. Representative agent frameworks of money demand do not accurately reflect the varying heterogenous behaviour of economic agents that encounter financial innovation and uncertainty.
Publication Name: Economic Journal
Subject: Economics
ISSN: 0013-0133
Year: 1997
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