Preface.- Foreword.- Introduction.- Classical Macroeconomc Theory.- Keynesian Macroeconomic Theory.- Dynamic Optimization Methods in Discrete Time.- Neoclassical Growth Theory.- Monetary Growth Theory.- The Demand for Money and the Welfare Cost of Inflation.- The Classics, Keynes, and Friedman.- Transactions Theories of Money Demand.- Portfolio Theories of Money Demand.- Conventional Money Demand Functions.- Modeling Trends.- Cointegration and the Demand for Money.- Balanced Growth and the Demand for Money.- Cross Country Evidence.- Microeconomic Foundations.- The New Monetary Aggregates.- Nominal Stylized Facts.- The Nonparametric Approach to Demand Analysis.- The Parametric Approach to Demand Analysis.- Locally Flexible Functional Forms and Demand Systems.- Globally flexible Functional Forms and Demand Systems.- The Econometrics of Demand Systems.- Applied Monetary Demand Analysis.- Future Research Agenda.- References.- Author Index.- Topic Index.
This is the most comprehensive textbook available on the money demand function and its role in modern macroeconomics. The book takes a microeconomic- and aggregation-theoretic approach to the topic and presents empirical evidence using state-of-the-art econometric methodology, while recognizing the existence of unsolved problems and the need for further developments. The new edition is fully revised and includes new chapters.
Increased coverage of theoretical and empirical approaches to the demand for money, including a new chapter on cross-country evidence
A new chapter on money demand issues and estimation of the welfare cost of inflation using tools from public finance and applied microeconomics
A new chapter on rational expectations macroeconomics and issues such as the Lucas critique, rules versus discretion in monetary policymaking, and time inconsistency
Increased coverage of the univariate and multivariate properties of the money demand variables, nonlinear chaotic dynamics, and self-organized criticality
Revised coverage of monetary asset demand systems based on locally flexible functional forms such as the translog, generalized Leontief, almost ideal demand system, Minflex Laurent, and the Normalized Quadratic reciprocal indirect utility function
Revised coverage of monetary asset demand systems based on globally flexible functional forms such as the Fourier and the Asymptotically Ideal Model
Increased coverage of the econometrics of demand systems highlighting the challenge inherent with achieving both economic and econometric regularity
A chapter with suggestions for potentially productive future research