A panel data approach to the demand for money in Bulgaria and Romania
AbstractThis article aims to investigate the relationship between real money, real Gross Domestic Product (GDP) and the nominal short-term rate of interest in the two new European Union (EU) member states. In pursuit of this objective, the tests of panel cointegration and Fully Modified Ordinary Least Squares (FMOLS) are conducted by using panel data. The data used in this study consist of annual data during period 1990 to 2008. The panel cointegration results confirm a long-run relationship between real money, real GDP and the nominal short-term rate of interest. Our empirical results also show that real GDP elasticity is 0.739 and nominal short-term rate of interest elasticity is −0.013 for the panel of the two countries.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 19 (2012)
Issue (Month): 8 (May)
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Web page: http://www.tandfonline.com/RAEL20
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- Chaido Dritsaki & Melina Dritsaki, 2012. "Exports and FDI: A Granger causality analysis in a heterogeneous panel," Economics Bulletin, AccessEcon, vol. 32(4), pages 3128-3139.
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