Modelling money demand for a panel of eight transitional economies

Narayan, Paresh 2010, Modelling money demand for a panel of eight transitional economies, Applied economics, vol. 42, no. 25, pp. 3293-3305.

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Title Modelling money demand for a panel of eight transitional economies
Author(s) Narayan, Paresh
Journal name Applied economics
Volume number 42
Issue number 25
Start page 3293
End page 3305
Total pages 13
Publisher Routledge
Place of publication London, England
Publication date 2010
ISSN 0003-6846
1466-4283
Summary In this article, we estimate money demand functions for a panel of eight transitional economies, using quarterly data for the period 1995:01 1995 to 2005:03. We find that real M1 and real M2 and their determinants, namely real income and short-term domestic interest rate, are cointegrated, both for individual countries as well as for the panel. Long-run elasticities suggest that consistent with theory, real income positively and nominal interest rate negatively impact real money demand. Our test for panel Granger causality suggests short-run bidirectional causality between M1 and M2 and their determinants. Finally, our tests for stability of the money demand functions reveal more cases of unstable money demand functions when M2 is used as a proxy for money demand.
Notes First published on 09 April 2009
Language eng
Field of Research 140212 Macroeconomics (incl Monetary and Fiscal Theory)
Socio Economic Objective 910108 Monetary Policy
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2009, Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30022725

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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