An error-correction model of the demand for equity mutual funds in the U.S. 1973–1994

The purpose of this paper is to estimate an error-correction model of the U.S. demand for equity mutual funds. Using annual data for the period 1973–1994, this study finds that changes in the demand for equity mutual funds have been significantly influenced by the changes in the rate of return on equity mutual funds and savings deposits, as well as by the growth in income over the long run. The authors would like to thank an anonymous referee of this journal for many useful comments and suggestions.