R. W. Hafer provides evidence in the third article of this issue, “Monetary Stabilization Policy: Evidence from Money Demand Forecasts,” indicating that such arguments are not well-founded. In this article, Hafer estimates two common versions of the short-run money demand function over the periods 1960-79 and 1960-84. Two tests are conducted: First, he tests for coefficient stability across the two periods. Evidence presented suggests that the estimated coefficients generally have remained stable. It does appear, however, that the models are subject to much larger errors during the past five years. This finding is explored in the second test, where quarterly forecast errors for the post-1979 period are examined. Although there are large forecast errors, they are offsetting in sign and magnitude. Moreover, their sum value is not different from zero. This finding, Hafer notes, leads to the conclusion that “arguments that monetary targeting to achieve desired long-term goals of stable income growth and price stability has become useless because of purported money demand instability are not supported by the evidence.”