Money Demand in Ireland 1972-1989: A Dynamic Equation

The relationship between the demand fir real money and its principal determinants is the vital link by which the actions of the monetary authorities affect the real economy. The estimation of money demand functions that are stable over a long period of time has traditionally, however, proved difficult.Here we attempt to overcome these difficulties by using econometric methods that analyse the time series properties of the data and that also rely on careful diagnostic testing. We achieve some success in estimating a relationship between real MS and a small number if determinants that appears to be satisfactorily stable over an 18 year period