Cuthbertson, Keith and Taylor, Mark P. (1992) A comparison of the rational expectations and the general-to-specific approaches to modelling the demand for M1. The Manchester School of Economic & Social Studies,, 60 (1). pp. 1-22.

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Abstract

The issues involved in assessing the relative performance of forward-looking (rational expectations) models and backward-looking error correction models based on the general-to-specific methodology are examined. Using the demand for M1 in the United Kingdom as a specific example, the authors find that both the error correction model and the forward model perform adequately, although a version of the error correction model does encompass the forward model in a nonnested test. The authors discuss reasons why the discrimination between the two models may prove difficult in practical situations using finite data sets. Copyright 1992 by Blackwell Publishers Ltd and The Victoria University of Manchester

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	The Manchester School of Economic & Social Studies,
Publisher:	Wiley-Blackwell Publishing Ltd.
ISSN:	0025-2034
Official Date:	1992
Dates:	Date Event 1992 Published
Volume:	60
Number:	1
Page Range:	pp. 1-22
Status:	Not Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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