PERSONAL SECTOR MONEY DEMAND IN THE UK

Non-parametric demand analysis is utilised to establish weaklyseparable subsets of monetary assets for the UK personal sectorin the context of a utility function consisting of durable andnon-durable consumption goods, services, leisure, and monetaryassets The admissible collections of assets are then combinedusing Divisia aggregation in order to produce monetary aggregateswhich are consistent with economic aggregation theory We investigatethe money demand properties of the aggregates and find relativelysimple, stable long-run money-demand functions for the UK personalsector with well determined error correction dynamics.