Survey Forecasts and Money Demand Functions: Some International Evidence

We derive a money demand function from a dynamic macroeconomic general equilibrium model to analyze the correlations between professional economists' forecasts of the growth rate of money supply, the inflation rate, the growth rate of real output, and the nominal interest rate. Upon estimating the money demand function on survey data of professional economists' forecasts for fourteen Asian-Pacific and Central and South-Eastern European countries, we find that the correlations between professional economists' forecasts are broadly consistent with the money demand function implied by the macroeconomic model.