Money Demand and Inflation in Dollarized Economies
AbstractMoney demand in dollarized economies often appears to be highly unstable, making it difficult to forecast and control inflation. In this paper, we show that a stable money demand function for Russia can be found for "effective broad money," which includes an estimate of foreign cash holdings. Moreover, we find that an excess supply of effective broad money is inflationary, while other excess money measures are not, and that effective broad money growth has the strongest and most persistent effect on short-run inflation.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 05/144.
Date of creation: 01 Jul 2005
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-CBA-2005-10-22 (Central Banking)
- NEP-CIS-2005-10-22 (Confederation of Independent States)
- NEP-MAC-2005-10-22 (Macroeconomics)
- NEP-MON-2005-10-22 (Monetary Economics)
- NEP-TRA-2005-10-22 (Transition Economics)
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