Panel Data Estimates of the Demand for Money in the Pacific Island Countries
AbstractThe Pedroni (2000) panel cointegration method is used to estimate the cointegrating equations for the demand for narrow money for a panel of five Pacific Island Countries (Fiji, Samoa, Solomons, Vanuatu and Papua New Guinea) for the period 1975-2007. The effects of financial reforms are analyzed with estimates from sub-sample periods. Our results suggest that there is a unique cointegrated long run relationship between real narrow money, real income and nominal rate of interest. The major finding is that the money demand function has been stable and financial reforms are yet to have any significant effects in the Pacific Island Countries.
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Bibliographic InfoPaper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2010_12.
Date of creation: 12 Aug 2010
Date of revision:
Demand for money; income elasticity; semi-interest rate elasticity.;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
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- Frauke Dobnik, 2011. "OLong-run Money Demand in OECD Countries – Cross-Member Cointegration," Ruhr Economic Papers 0237, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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