Husain, Fazal and Mahmood, Tariq (1998): Causality Between Money and Prices: Evidence from Pakistan. Published in: The Pakistan Development Review , Vol. 37, No. 4 (1998): pp. 1155-1161.
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The objective of the paper is to re-examine the causal relationship between money and prices in Pakistan using recent data and employing cointegration and error correction models. Two measures of prices (CPI and WPI) and three measures of money stocks (M0, M1, and M2) were taken for the period July 1981 to June 1998. The analysis indicates a long run relationship between prices and M2 definition of money. The other definitions of money do not seem to be related with prices. The analysis further suggests a unidirectional causality running from money to prices and thus supporting the monetarists’s claim regarding the role of money. The results, however, are different from the findings of earlier studies in Pakistan which generally report bidirectionl causality between prices and money.
|Item Type:||MPRA Paper|
|Institution:||Pakistan Institute of Development Economics|
|Original Title:||Causality Between Money and Prices: Evidence from Pakistan|
|Keywords:||Money; Prices; Pakistan; Causality; Long Run Relation|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles
|Depositing User:||Fazal Husain|
|Date Deposited:||24. Sep 2007|
|Last Modified:||25. Feb 2013 08:08|