The Impact of Banking Crises on Money Demand and Price Stability
AbstractThis paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975-98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. However, the results on price stability are mixed; for three out of the seven countries, there appears to be evidence of instability. . Copyright 2002, International Monetary Fund
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal IMF Staff Papers.
Volume (Year): 49 (2002)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Martinez Peria, Maria Soledad, 2000. "The impact of banking crises on money demand and price stability," Policy Research Working Paper Series 2305, The World Bank.
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carmen M. Reinhart & Vincent R. Reinhart, 1991.
"Output Fluctuations and Monetary Shocks: Evidence from Colombia,"
IMF Staff Papers,
Palgrave Macmillan, vol. 38(4), pages 705-735, December.
- Reinhart, Carmen & Reinhart, Vincent, 1991. "Output Fluctuations and Monetary Shocks: Evidence from Colombia," MPRA Paper 6980, University Library of Munich, Germany.
- Vincent Reinhart & Carmen Reinhart, 1991. "Output Fluctuations and Monetary Shocks: Evidence from Colombia," IMF Working Papers 91/35, International Monetary Fund.
- Darrat, Ali F., 1985. "The demand for money in a developing economy: The case of Kenya," World Development, Elsevier, vol. 13(10-11), pages 1163-1170.
- Brunello Giorgio & Ariga Kenn & Nishiyama Yoshihiko & Ohkusa Yasushi, 1995. "Recent Changes in the Internal Structure of Wages and Employment in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 9(2), pages 105-129, June.
- Robert Corker, 1990. "Wealth, Financial Liberalization, and the Demand for Money in Japan," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 418-432, June.
- Ericsson, Neil R., 1992.
"Cointegration, exogeneity, and policy analysis: An overview,"
Journal of Policy Modeling,
Elsevier, vol. 14(3), pages 251-280, June.
- Neil R. Ericsson, 1991. "Cointegration, exogeneity, and policy analysis: an overview," International Finance Discussion Papers 415, Board of Governors of the Federal Reserve System (U.S.).
- Karatzas, George, 1993. "Government Deficits, Monetization, International Reserve Flows, and Inflation in Selected African Countries," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 46(2-3), pages 201-224.
- E. P. Davis & S. G. B. Henry, 1994. "The Use of Financial Spreads as Indicator Variables: Evidence for the U.K. and Germany," IMF Working Papers 94/31, International Monetary Fund.
- Fullerton, Thomas Jr., 1993. "Inflationary trends in Colombia," Journal of Policy Modeling, Elsevier, vol. 15(4), pages 463-468, August.
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
- Stock, James H. & Watson, Mark W., 1989. "Interpreting the evidence on money-income causality," Journal of Econometrics, Elsevier, vol. 40(1), pages 161-181, January.
- Miller, Stephen M, 1991. "Monetary Dynamics: An Application of Cointegration and Error-Correction Modeling," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 139-54, May.
- Luis Oscar Herrera & Rodrigo Vergara, 1992. "Estabilidad de la Demanda de Dinero, Cointegración y Política Monetaria," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 29(86), pages 35-54.
- Gordon de Brouwer & Neil R. Ericsson, 1995.
"Modelling inflation in Australia,"
International Finance Discussion Papers
530, Board of Governors of the Federal Reserve System (U.S.).
- Hansen, Bruce E., 1992.
"Testing for parameter instability in linear models,"
Journal of Policy Modeling,
Elsevier, vol. 14(4), pages 517-533, August.
- Tom Doan, . "STABTEST: RATS procedure to perform Hansen's stability test for OLS," Statistical Software Components RTS00199, Boston College Department of Economics.
- Friedman, Benjamin M & Kuttner, Kenneth N, 1992. "Money, Income, Prices, and Interest Rates," American Economic Review, American Economic Association, vol. 82(3), pages 472-92, June.
- Hiroshi Yoshikawa & Yoshiyuki Takeuchi, 1989. "Real Wages and the Japanese Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 7(1), pages 1-40, April.
- McNown, Robert & S. Wallace, Myles, 1989. "National price levels, purchasing power parity, and cointegration: a test of four high inflation economies," Journal of International Money and Finance, Elsevier, vol. 8(4), pages 533-545, December.
- Alicia GarcÃa-Herrero, 1997. "Monetary Impact of a Banking Crisis and the Conduct of Monetary Policy," IMF Working Papers 97/124, International Monetary Fund.
- Kamas, Linda, 1995. "Monetary policy and inflation under the crawling peg: Some evidence from VARs for Colombia," Journal of Development Economics, Elsevier, vol. 46(1), pages 145-161, February.
- Josef Baumgartner & Ramana Ramaswamy, 1996. "Inflation Targeting in the United Kingdom: Information Content of Financial and Monetary Variables," IMF Working Papers 96/44, International Monetary Fund.
- repec:imf:imfpdp:9410 is not listed on IDEAS
- Brian R. Horrigan, 1986. "Monetary indicators, commodity prices, and inflation," Working Papers 86-7, Federal Reserve Bank of Philadelphia.
- Martin MÃ¼hleisen, 1995. "Monetary Policy and Inflation Indicators for Finland," IMF Working Papers 95/115, International Monetary Fund.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- Sánchez-Fung, José R., 2008. "The day-to-day interbank market, volatility, and central bank intervention in a developing economy," MPRA Paper 15648, University Library of Munich, Germany.
- Aykut Kibritcioglu, 2002. "Monitoring Banking Sector Fragility," Macroeconomics 0206004, EconWPA, revised 05 Apr 2004.
- Luis Ignacio JÃ¡come, 2008. "Central Bank Involvement in Banking Crises in Latin America," IMF Working Papers 08/135, International Monetary Fund.
- Alicia García Herrero & Pedro del Río López, 2003. "Implications of the design of monetary policy for financial stability," Macroeconomics 0304008, EconWPA.
- Honohan, Patrick, 2001. "Recapitalizing banking systems : implications for incentives and fiscal and monetary policy," Policy Research Working Paper Series 2540, The World Bank.
- Bowo Setiyono & Amine Tarazi, 2014. "Disclosure, ownership structure and bank risk: Evidence from Asia," Working Papers hal-00947590, HAL.
- Kibritcioglu, Aykut, 2002. "Excessive Risk-Taking, Banking Sector Fragility, and Banking Crises," Working Papers 02-0114, University of Illinois at Urbana-Champaign, College of Business.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If references are entirely missing, you can add them using this form.