An Econometric Analysis of Money Demand and Its Stability in the Malaysian Economy
AbstractThe paper utilizes cointegration technique and a battery of diagnostics statistics to evaluate the behaviour of money demand (M1 and M2) and examine whether the short-run money demand specification is structurally stable. The main finding is that, although there exists no long run relationship between M1 and the other macroeconomic variables considered, the long run relationship of M2 demand function is established. However, the evidence suggests that the short run of M2 demand is unstable. Thus, the usefulness of M2 target in the conduct of monetary policy depends crucially on the extent to which the policy makers can detect the structural break in the money demand function and on how long it takes for them to realize that there exists a behavioral change in the demand. Otherwise, the policy makers should only focus on long-run stabilization policies.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.
Volume (Year): 33 (1998)
Issue (Month): 1 (January)
Contact details of provider:
Postal: University of Delhi, Delhi 110 007
Phone: 91-11-2766-6533/34/35, 2766-6703/04/05
Web page: http://www.ierdse.org/
More information through EDIRC
Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Muhd-Zulkhibri Abdul Majid, 2004. "Reassessing The Stability of Broad Money Demand in Malaysia," Macroeconomics 0405020, EconWPA.
- Dahalan, Jauhari & Sharma, Subhash C. & Sylwester, Kevin, 2005. "Divisia monetary aggregates and money demand for Malaysia," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1137-1153, January.
- Mohsen Bahmani-Oskooee & Hafez Rehman, 2005. "Stability of the money demand function in Asian developing countries," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 773-792.
- Mansor Ibrhim, 2001. "Financial Factors and the Empirical Behavior of Money Demand: A Case Study of Malaysia," International Economic Journal, Taylor & Francis Journals, vol. 15(3), pages 55-72.
- Dahalan, Jauhari & Sharma, Subhash C. & Sylwester, Kevin, 2007. "Scale variable specification in a money demand function for Malaysia," Journal of Asian Economics, Elsevier, vol. 18(6), pages 867-882, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pami Dua).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.