Kumar, Saten and Singh, Rup (2009): Some Empirical Evidence on the Demand for Money in the Pacific Island Countries. Forthcoming in: Studies in Economics and Finance : pp. 1-14.
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This paper explores the stability of the demand for narrow money in the Pacific Island Countries viz, Fiji, Vanuatu, Samoa, Solomons and Papua New Guinea (PNG). The results from the time series approaches of LSE-Hendry’s General to Specific (GETS) and Johansen’s Maximum Likelihood (JML) suggest that real income, nominal rate of interest and real narrow money, are cointegrated. The CUSUM and CUSUMSQ stability test results indicate that the demand for money functions for these countries are stable and therefore the respective monetary authorities may consider targeting money supply in their conduct of monetary policy.
|Item Type:||MPRA Paper|
|Original Title:||Some Empirical Evidence on the Demand for Money in the Pacific Island Countries|
|English Title:||Some Empirical Evidence on the Demand for Money in the Pacific Island Countries|
|Keywords:||Cointegration, Demand for Money, General to Specific Method and Johansen Maximum Likelihood Method|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money
|Depositing User:||Saten Kumar|
|Date Deposited:||18. Nov 2009 10:36|
|Last Modified:||12. Feb 2013 22:02|
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