Personal sector money demand in the UK

Non-parametric demand analysis is utilised to establish weakly separable subset's of monetary assets for the UK personal sector in the context of a utility function consisting of durable and non-durable consumption goods, services, leisure, and monetary assets. The admissible collections of assets are then combined using Divisia aggregation in order to produce monetary aggregates which are consistent with economic aggregation theory. We investigate the money demand properties of the aggregates and find relatively simple, stable long-run money-demand functions for the UK personal sector with well determined error correction dynamics.