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How stable is the demand for money in emerging economies?

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  • Sahar Bahmani
  • Ali Kutan

Abstract

One of the key elements of implementing the monetary policy is stability of the demand for money. The literature includes a large number of studies that have tested the stability of the money demand in developed as well as less-developed countries but not in emerging economies of Eastern Europe. As market-based data becomes available from these countries, there is an urgency to test old theories for these modern market-oriented economies. In this article we consider the experiences of Armenia, Bulgaria, the Czech Republic, Hungary, Poland, Russia and the Slovak Republic. Using the bounds testing approach to error-correction modelling and cointegration, we show that money demand is stable in these countries.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 42 (2010)
Issue (Month): 26 ()
Pages: 3307-3318

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Handle: RePEc:taf:applec:v:42:y:2010:i:26:p:3307-3318

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References

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Cited by:
  1. Kumar, Saten, 2011. "Financial reforms and money demand: Evidence from 20 developing countries," Economic Systems, Elsevier, vol. 35(3), pages 323-334, September.
  2. A. M. M. Jamal & Yu Hsing, 2011. "The Demand for Money in a Simultaneous-Equation Framework," Economics Bulletin, AccessEcon, vol. 31(2), pages 1929-1934.
  3. Sahar Bahmani, 2010. "Openness and the speed of adjustment in the money market," Journal of Economics and Finance, Springer, vol. 34(2), pages 218-227, April.

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