Higgins et al. (2006), report several statistically significant partial correlates with US per capita income growth. However, Levine and Renelt (1992) demonstrate that such correlations are hardly ever robust to changing the combination of conditioning variables included. We ask, whether the...

Higgins <italic>et al</italic>. (2006), report several statistically significant partial correlates with US per capita income growth. However, Levine and Renelt (1992) demonstrate that such correlations are hardly ever robust to changing the combination of conditioning variables included. We ask, whether the...

We enter inflation uncertainty into error-correction models (EC) of US M1 and M2 money demand. We estimate the models using an instrumental variables procedure that is robust to mis-specification of inflation uncertainty. We find inflation uncertainty has a negative effect on M1 demand and a...