The Demand for Money by Firms: Some Additional Empirical Results


The paper builds on Mulligan (1997) in three ways. First, parameters of the empirical model are linked to those of an explicit maximizing model of firm behavior. Second, the empirical specification in the present paper is much more realistic, allowing for price deflators that are a function of a firm's input and output prices, lags in the money demand function, firm-specific opportunity costs of holding money, nonlinear demand functions, and financial technology that varies according to urban location. Third, the model is estimated using a broader sample of COMPUSTAT firms.

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Hard copies of the paper are being circulated as Population Research Center Discussion Paper Series #97-1, March 1997.

© copyright 1996 by Casey B. Mulligan.