A dynamic model of aggregate money demand in a European Monetary Union.

Recent proposals for a European Monetary Union raise the prospect of a European-wide monetary authority. Successful implementation of monetary policy by a European central bank would require the existence of a stable relationship between the quantity of money demanded and other macro-variables. This thesis examines the issues and controversies arising from the movement towards European Monetary Union as envisaged by the Maastricht treaty. The theoretical basis of the estimation of dynamic money demand relationships is presented, and a dynamic error-correction model of a nine-country aggregate money demand function is estimated.