On the consistency of arbitrary money-demand functions with the Sidrauski and the shopping-time models

Rubens Cysne and David Turchick

No 666, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: This paper investigates which properties money-demand functions have to satisfy to be consistent with multidimensional extensions of Lucasí(2000) versions of the Sidrauski (1967) and the shopping-time models. We also investigate how such classes of models relate to each other regarding the rationalization of money demands. We conclude that money demand functions rationalizable by the shoppingtime model are always rationalizable by the Sidrauski model, but that the converse is not true. The log-log money demand with an interest-rate elasticity greater than or equal to one and the semi-log money demand are counterexamples.

Date: 2008-01-01
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:666

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