Benjamin Keen

We find strong evidence of a stable “money demand” relationship for MZM and M2M through the 1990s.

The total amount of U.S. currency held by the non bank public equals about $375 billion, or nearly $1,400 for every man, woman, and child in the country. Clearly, few individuals ever hold this much cash at any point in time.

In years past, the growth rates of money measures such as M2 received considerable attention because evidence showed that there was a simple and stable long-run relationship between M2, nominal income, and inflation.