Long-Run Money Demand in Canada: In Search of Stability
Abstract
The authors search for a long-run cointegrating relationship among real money balances, real income, and interest rates, extending the work of Steve Ambler and Algin Paquet (1990), who explore this issue in the Canadian context employing the methods of Robert F. Engle and Clive W. Granger (1987). First, they uncover parameter estimates of the cointegrated relationships using three different methods of estimation. Second, the authors employ the Hansen (1992) procedure to search for structural instability in cointegrating relationships with unknown break points. They find empirical support for a stable cointegrating relationship among real M1, real income, and short-term interest rates in Canada for the period 1953:1-1990:4. Copyright 1996 by MIT Press.Download Info
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Bibliographic Info
Article provided by MIT Press in its journal Review of Economics & Statistics.
Volume (Year): 78 (1996)
Issue (Month): 2 (May)
Pages: 345-48
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Web page: http://mitpress.mit.edu/journals/
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Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535
Related research
Keywords:Other versions of this item:
- Lucas, R.F. & Haug, A.A., 1992. "Long-Run Money Demand in Canada: In Search of Stability," Papers 92-4, Saskatchewan - Department of Economics.
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Kumar, Saten & Webber, Don J., 2010.
"Australasian money demand stability: Application of structural break tests,"
MPRA Paper
27569, University Library of Munich, Germany.
- Saten Kumar & Don J. Webber, 2013. "Australasian money demand stability: application of structural break tests," Applied Economics, Taylor and Francis Journals, vol. 45(8), pages 1011-1025, March.
- Don J. Webber & Saten Kumar, 2011. "Australasian money demand stability:Application of structural break tests," Discussion Papers 1101, University of the West of England, Department of Economics.
- Brian M. Doyle, 2000. ""Here, dollars, dollars ..."estimating currency demand and worldwide currency substitution," International Finance Discussion Papers 657, Board of Governors of the Federal Reserve System (U.S.).
- Rao, B. Bhaskara & Kumar, Saten, 2010.
"Error-Correction Based Panel Estimates of the Demand for Money of Selected Asian Countries with the Extreme Bounds Analysis,"
MPRA Paper
27263, University Library of Munich, Germany.
- Kumar, Saten & Rao, B. Bhaskara, 2012. "Error-correction based panel estimates of the demand for money of selected Asian countries with the extreme bounds analysis," Economic Modelling, Elsevier, vol. 29(4), pages 1181-1188.
- Georgopoulos, George J., 2006. "Estimating the demand for money in Canada: Does including an own rate of return matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(4), pages 513-529, September.
- Arize, A. C. & Shwiff, Steven S., 1998. "The appropriate exchange-rate variable in the money demand of 25 countries: an empirical investigation," The North American Journal of Economics and Finance, Elsevier, vol. 9(2), pages 169-185, December.
- Ahtiala, Pekka & Kanto, Antti, 2002. "Contractionary effects of expansionary fiscal policy: theory and tests," Economic Modelling, Elsevier, vol. 19(1), pages 137-152, January.
- Scott Hendry, 1995. "Long-Run Demand for M1," Macroeconomics 9511001, EconWPA.
- Chen, Show-Lin & Wu, Jyh-Lin, 2005. "Long-run money demand revisited: evidence from a non-linear approach," Journal of International Money and Finance, Elsevier, vol. 24(1), pages 19-37, February.
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