Money Demand and Economic Liberalization in a Small Open Economyâ€”Trinidad and Tobago
AbstractEconomic liberalization creates potential instability in money demand. The introduction of liberalization in the early 1990s coincided with instability in the long-run demand for broad money (M2). OLS estimates confirm the presence of a structural break in the M2 model. Monetary policy should be based on a narrow definition of money. Moreover, the demand for money function must take explicit account of the openness of the economy. The results have important implications for policymakers in other Caribbean countries that are contemplating economic liberalization. Copyright Kluwer Academic Publishers 2001
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 12 (2001)
Issue (Month): 3 (July)
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Web page: http://www.springerlink.com/link.asp?id=100323
Caribbean; cointegration; demand for money; economic liberalization;
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