Global Money Demand Shifts to Nominal Adjustments, Impacting Economies Worldwide
The article explores how people adjust their money holdings, whether in nominal or real terms. The researchers tested this for 27 countries and found strong support for the nominal adjustment hypothesis. The equations used in the study were accurate and held up well against different specifications. While there was some evidence of instability before and after 1973, it did not change the overall conclusion that nominal adjustment is more common than real adjustment.