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Some International Evidence on the Quantity Theory of Money

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  • Duck, Nigel W
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    Abstract

    This paper develops a two-equation model of money, interest rates, and inflation based on the simple quantity theory an d Fisher's hypothesis about nominal interest rates. The model has both within-equation and cross-equation restrictions that are tested on long-run average cross-country data covering the period 1962-88. The major finding is that the restrictions cannot be easily rejected and this suggests that the behavior of interest rates and inflation in a major part of the postwar period can be understood in terms of classical, monetary forces. Copyright 1993 by Ohio State University Press.

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    Bibliographic Info

    Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

    Volume (Year): 25 (1993)
    Issue (Month): 1 (February)
    Pages: 1-12

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    Handle: RePEc:mcb:jmoncb:v:25:y:1993:i:1:p:1-12

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

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    Cited by:
    1. Goohoon Kwon & Lavern McFarlane & Wayne Robinson, 2009. "Public Debt, Money Supply, and Inflation: A Cross-Country Study," IMF Staff Papers, Palgrave Macmillan, vol. 56(3), pages 476-515, August.
    2. Moazzami, Bakhtiar & Gupta, Kanhaya L., 1995. "The quantity theory of money and its long-run implications," Journal of Macroeconomics, Elsevier, vol. 17(4), pages 667-682.
    3. William Poole, 1994. "Monetary aggregates targeting in a low-inflation economy," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 38, pages 87-135.
    4. repec:ebl:ecbull:v:3:y:2007:i:64:p:1-18 is not listed on IDEAS
    5. Lothian, James R. & McCarthy, Cornelia H., 2009. "The behavior of money and other economic variables: Two natural experiments," Journal of International Money and Finance, Elsevier, vol. 28(7), pages 1204-1220, November.
    6. Chan Il Park, 1998. "Transactions Demand for Money and the Inverse Relation Between Inflation and Output: the Case of Korean Economy," International Economic Journal, Taylor & Francis Journals, vol. 12(1), pages 39-51.
    7. Puah, Chin-Hong & Habibullah, Muzafar Shah & Lim, Kian-Ping, 2006. "Testing long-run neutrality of money: evidence from Malaysian stock market," MPRA Paper 37676, University Library of Munich, Germany.
    8. Ashra, Sunil & Chattopadhyay, Saumen & Chaudhuri, Kausik, 2004. "Deficit, money and price: the Indian experience," Journal of Policy Modeling, Elsevier, vol. 26(3), pages 289-299, April.
    9. Shyh-Wei Chen, 2007. "Evidence of the Long-Run Neutrality of Money: The Case of South Korea and Taiwan," Economics Bulletin, AccessEcon, vol. 3(64), pages 1-18.
    10. Jamie Emerson, 2006. "The Quantity Theory of Money: Evidence from the United States," Economics Bulletin, AccessEcon, vol. 5(2), pages 1-6.
    11. James Lothian & Yusif Simaan, 1998. "International Financial Relations Under the Current Float: Evidence from Panel Data," Open Economies Review, Springer, vol. 9(4), pages 293-313, October.
    12. Alimi, R. Santos, 2012. "The Quantity Theory of Money and Its Long Run Implications: Empirical Evidence from Nigeria," MPRA Paper 49598, University Library of Munich, Germany.
    13. Lothian, James R., 1997. "Multi-country evidence on the behavior of purchasing power parity under the current float," Journal of International Money and Finance, Elsevier, vol. 16(1), pages 19-35, February.
    14. Coppock, Lee & Poitras, Marc, 2000. "Evaluating the Fisher effect in long-term cross-country averages," International Review of Economics & Finance, Elsevier, vol. 9(2), pages 181-192.
    15. Farshid Vahid, 2000. "Clustering Regression Functions in a Panel," Econometric Society World Congress 2000 Contributed Papers 0251, Econometric Society.
    16. repec:ebl:ecbull:v:5:y:2006:i:2:p:1-6 is not listed on IDEAS
    17. Stefan Gerlach, 1995. "Testing the quantity theory using long-run averaged cross-country data," BIS Working Papers 31, Bank for International Settlements.
    18. Moosa, Imad A., 1997. "Testing the long-run neutrality of money in a developing economy: the case of India," Journal of Development Economics, Elsevier, vol. 53(1), pages 139-155, June.

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