Alternative Models of Buffer Stock Money: An Empirical Investigation.

This paper contrasts traditional costs-of-adjustment models of the demand for money with alternative models w hich take into account private agents' saving behavior. In the presen ce of saving flows, the dynamic structure of forward-looking demand f or money functions is altered, and the author shows that there is som e evidence to support his alternative approach. However, the reported estimates seem to cast some doubt on the usefulness of estimating fo rward-looking models. The author also argues that the structure of fo rward-looking models may be unduly restrictive when compared to backw ard-looking models. Copyright 1988 by Scottish Economic Society.