Aggregate Money Demand Functions : Springer : 9789401073080 : 9401073082 : 26 Sep 2011 : The econometric consequences of nonstationary data have wide ranging im­ plications for empirical research in economics. Specifically, these issues have implications for the study of empirical relations such as a money demand func­ tion that links macroeconomic aggregates: real money balances, real income and a nominal interest rate. Traditional monetary theory predicts that these nonsta­ tionary series form a cointegrating relation and accordingly, that the dynamics of a vector process comprised of these variables generates distinct patterns. Re­ cent econometric developments designed to cope with nonstationarities have changed the course of empirical research in the area, but many fundamental challenges, for example the issue of identification, remain. This book represents the efforts undertaken by the authors in recent years in an effort to determine the consequences that nonstationarity has for