In his comment, Alex Cukierman argues that to obtain better estimates of price, or money-illusion, effects in an aggregate consumption function one should disaggregate the consumer price index (CPI) into its components and include these separate price components in the equation, rather than just including the CPI as we did. He then estimates a consumption function for our sample period, 1955 1-1965 IV, using, our data for real per capita consumption, net labor income, and wealth, and disaggregated data on five individual price series the CPI components for food, housing, apparel, transportation, and health and recreation.' In his representative equation, the lag on income is shortened from seven quarters to four quarters while the lags on the individtual prices vary from one to three quarters, as compared with our original seven-quarter lag on the CPI,2 As is clear from Cukierman's Table 1, the coefficient sums of Cukierman's best equation (his 1-3) are fairly similar to those of our final equation (his 1-1). The sums of his income coefficients and price coefficients are a bit smaller than ours, and his wealth coefficient is a bit larger. The main difference between equations 1-1 and 1-3 in Cukierman's Table 1 is that the sum of his price coefficients (in 1-3) is only 2.85 times its standard error, while ours (in 1-1) is 11.6 times its standard error. From this result, Cukierman concludes that the money-illusion coefficient is smnaller and less sigynificant when the consumiier price index is disaggregated. Nevertheless the results still seemto indicate some deg,ree of monev illusion. The procedure Cukier-nian uses raises two questions that are best handled sequentially,,. First, to what extent are his estimi-ates the resuilt of changing the lag lengths in the estimated equation, and to what extent are they duie to disagg(regration of the price variable? Second, if disaggwreg-ation. is the imip ortant cause of the divergence between his results and ours, what is the best wav to interpr-et his resuilts? The first two sections below consider these two questions, and the third section concluides with somie further comnments.

I. AN INTRODUCTION TO MACROECONOMICS. 1. Actual and Potential GNP: Fluctuations and Growth. 2. A Review of the National Income and Product Accounts. 3. Introduction to Income Determination: Multiplier. II. NATIONAL INCOME DETERMINATION: THE STATIC EQUILIBRIUM MODEL. 4. Demand-Side Equilibrium: Income and the Interest Rate. 5. An Introduction to Monetary and Fiscal Policy. 6. Demand and Supply in the Labor Market. 7. Supply-Side Equilibrium: Output and the Price Level. 8. Equilibrium in the Static Model. 9. Monetary, Fiscal, and Incomes Policy. 10. Search, Wage Rigidity, and Unemployment. 11. Rational Expectations and Demand Policy. III. SECTORAL DEMAND FUNCTIONS AND EXTENSIONS OF THE STATIC MODEL. 12. Consumption and Consumer Expenditure. 13. Investment Demand. 14. Demand for Money. 15. Supply of Money. 16. Monetary and Fiscal Policy in the Extended Model. 17. Foreign Sector and the Balance of Payments. 18. Macroeconomics When Markets Do Not Clear. IV. MEDIUM-TERM DYNAMICS: BETWEEN STATIC EQUILIBRIUM AND LONG-RUN GROWTH. 19. Inflation, Productivity, and Income Distribution. 20. Inflation and Unemployment: Phillips Curve. 21. Introduction to Stock-Adjustment Dynamics. 22. Trend Growth in the Static Model. V. LONG-RUN GROWTH WITH FULL EMPLOYMENT. 23. Introduction to Growth Models. 24. Basic Neoclassical Growth Model. 25. Basic Model Extended: Varying Saving Assumptions. 26. Golden Rule and an Introduction to Optimal Growth Models. 27. Medium-Term Growth and The Measure of Our Ignorance.