The Demand for Money

1. Front Matter

   Pages i-xxv

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2. Static Monetary Macroeconomics

   1. Front Matter

      Pages 1-1

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   2. Classical Macroeconomic Theory

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      Pages 3-11

   3. Keynesian Macroeconomic Theory

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      Pages 13-24

3. Dynamic Monetary Macroeconomics

   1. Front Matter

      Pages 25-25

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   2. Neoclassical Growth Theory

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      Pages 27-40

   3. Monetary Growth Theory

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      Pages 41-51

4. Theoretical Approaches to the Demand for Money

   1. Front Matter

      Pages 53-53

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   2. The Classics, Keynes, and Friedman

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      Pages 55-66

   3. Transactions Theories of Money Demand

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      Pages 67-78

   4. Portfolio Theories of Money Demand

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      Pages 79-87

5. Empirical Approaches to the Demand for Money

   1. Front Matter

      Pages 89-89

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   2. Conventional Demand for Money Functions

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      Pages 91-112

   3. Modeling Trends in the Variables of the Money Demand Function

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      Pages 113-125

   4. Cointegration and the Aggregate Demand for Money Function

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      Pages 127-139

   5. Balanced Growth, the Demand for Money, and Monetary Aggregation

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      Pages 141-155

6. Microfoundations and Monetary Aggregation

   1. Front Matter

      Pages 157-157

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   2. The Microeconomic Foundations of the Definition of Money

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      Pages 159-171

   3. The New Monetary Aggregates

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      Pages 173-186

   4. The Stylized Facts of the Monetary Variables

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      Pages 187-198

Almost half a century has elapsed since the demand for money began to attract widespread attention from economists and econometricians, and it has been a topic of ongoing controversy and research ever since. Interest in the topic stemmed from three principal sources. First of all, there was the matter of the internal dynamics of macroeco­ nomics, to which Harry Johnson drew attention in his 1971 Ely Lecture on "The Keynesian Revolution and the Monetarist Counter-Revolution," American Economic Review 61 (May 1971). The main lesson about money that had been drawn from the so-called "Keynesian Revolution" was - rightly or wrongly - that it didn't matter all that much. The inherited wisdom that undergraduates absorbed in the 1950s was that macroeconomics was above all about the determination of income and employment, that the critical factors here were saving and investment decisions, and that monetary factors, to the extent that they mattered at all, only had an influence on these all important variables through a rather narrow range of market interest rates. Conventional wisdom never goes unchallenged in economics, except where its creators manage to control access to graduate schools and the journals, and it is with no cynical intent that I confirm Johnson's suggestion that those of us who embarked on academic careers in the '60s found in this wisdom a ready-made target.

• Keynes
• cointegration
• consumer
• econometrics
• economic policy
• growth
• macroeconomics
• macroeconomics/monetary economics
• monetary economics
• theoretical and empirical approaches

• University of Calgary, Canada

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