Determinants of money demand in Ireland 1971 to 1988: rounding-up the usual suspects

Abstract

Unless some form of stable relationship between money demand and economic activity exists, there is no possibility of the monetary authorities being able to affect economic activity by changing the money supply. This fact, coupled with the breakdown of conventionally estimated demand for money functions in the 1970s1 has led to a plethora of research projects seeking to identify and estimate a stable demand for money relationship. The present note reports the work to date on one such project, which uses the recently developed cointegration methodology to attempt to identify a stable money demand function using Irish monthly data.