PERSONAL SECTOR MONEY DEMAND IN THE UK

Non-parametric demand analysis is utilised to establish weakly separab le subset's of monetary assets for the UK personal sector in the conte xt of a utility function consisting of durable and non-durable consump tion goods, services, leisure, and monetary assets. The admissible col lections of assets are then combined using Divisia aggregation in orde r to produce monetary aggregates which are consistent with economic ag gregation theory. We investigate the money demand properties of the ag gregates and find relatively simple, stable long-run money-demand func tions for the UK personal sector with well determined error correction dynamics.