本文的目的是估計股票價格是否對台灣的貨幣需求函數有顯著影響。根據傅利曼的假設，由於反應速度的不同，股票價格存在兩種反作用。通過實證工作，我們可以清楚地觀察到這兩種效應的大小，並將其與其他國家的實證結果進行比較。

除此之外，台灣的利率自2002年以來一直維持在低位。由於變量沒有顯著變化，我們無法準確地得出利率與貨幣需求之間的關係。利率不精確的後果可能會影響貨幣需求函數的穩定性並導致嚴重的估計偏差；由於所有利率都具有相同的趨勢，因此關注不同的期限並沒有太大改善。我解決這個障礙的方法是將台灣的利率與吳估計的美國影子利率聯繫起來，並創建一個全新的利率變量，試圖看看它是否會導致更好的結果。

最終的的結論有兩個分支。如果我們用傳統利率估計，模型無法捕捉替代效應，而只能捕捉到財富效應。在應用新的影子影率時，兩種效應都被模型顯著反映。雖然沒有辦法知道確切真相，但本文仍然提供證據以供參考。

The purpose of this paper is to estimate whether stock prices have signifcant effect on the money demand function in Taiwan.According to Friedman's assumption, there exists two counter effects of stock prices due to different speed of reaction. Through empirical work, we can clearly observe the magnitude of the two effects and compare it with empirical results in other countries.

Apart from this,Taiwan's interest rate has maintained in a low level since 2002. Because the variable did not change signifcantly, we can not accurately find the relationship between the interest rate and the money demand. The consequence with imprecise interest rates may affects the stability of the money demand function and cause severely biased estimates; as all interest rates share same tendency, focusing on different maturity doesn't ameliorate much. The way I resolve this obstacle is linking Taiwan's interest rate to the U.S. shadow rate, which was estimated by Wu, and create a brand new interest rate variable, trying to see if it leads to a better result.

The conclusion goes to two divergences. If we estimate with the traditional interest rate, the model fail to capture the substitution effect, but only the wealth effect lef. While applying with the new shadow rate, both effects are reflected by the model signifcantly.
Though there is no way of knowing the truth, this paper still provides evidence for reference.

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