This paper provides tests of an econometric model of the demand for UK M0. The existence of a long-run cointegrating relationship between M0 and key economic variables is established and a plausible dynamic error-correction model is estimated. A model that passes standard specification tests is...

Part 2 This paper is the second part of a study on the determinants of the broad money aggregate M4, following a similar analysis of the personal sector developed in Bank of England WORKING PAPER No 61. It models the broad money holdings of both industrial and commercial companies (ICCs) and...