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Money Demand Regression

May 13, 2023

Should have the following headings only:

I. Introduction

II. Literature Review: will need to cite at least two scholarly articles related to estimating the demand for money III. Model The model should look something like this: M1 = a + b1interest + b2 time where a is the intercept estimate, b1 is the coefficient estimate on an interest rate (the interest rate is a proxy for the price of money; or the interest you give up by holding money is the opportunity cost of holding your wealth in the form of money) and b2 is the coefficient estimate on the variable time; time is a proxy for all other things and is to account for the identification problem, or to acknowledge that Ceteris is not Paribus in the real world. You may want to Google “regression analysis” and read up on it. IV. Results of the Model: Analyze the results of the regression V. Summary and Conclusions

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