THE PAKISTAN DEVELOPMENT REVIEW
An Annual Money Demand Function for Pakistan: Some Further Results
The paper highlights the main issues involved in the theoretical and empirical estimation of the money demand function in Pakistan. Much of the recent empirical work on money demand has used income as a scale variable. Our work seeks to assess the relevant importance of the permanent income as an argument of the demand function for money. The results of our estimation indicate that a stable money demand function exists using permanent income.