Dallas S. Batten and R. W. Hafer investigate the hypothesis that foreign-generated disturbances to domestic money demand impinge on the relationship between domestic money growth and domestic economic activity. Using a reduced-form approach and three different variables to measure this phenomenon, known generally as currency substitution, they find no statistical support for this hypothesis in either Germany or Japan, and only weak support for the existence of currency substitution in the United States. Further analysis reveals that the U.S. result is most likely spurious. The authors conclude that, if currency substitution does exist, it is not measured appropriately by the variables that have appeared in the literature on this topic and that are employed in this study. Furthermore, in the absence of more appropriate measures, there is little empirical evidence that foreign shocks to domestic money demand are important enough to enter the monetary policymaking process.