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Money Demand and Disinflation in Selected CEECs during the Accession to the EU Author info | Abstract | Publisher info | Download info | Related research | Statistics Fidrmuc, Jarko
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A panel data set for six countries (Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia) is used to estimate money demand with panel cointegration methods over the recent disinflation period. The basic money demand model is able to convincingly explain the long-run dynamics of M2 in the selected countries. However, money demand is found to have been significantly determined by the euro area interest rates and the exchange rate against the euro, which indicates possible instability of money demand functions in the CEECs. Therefore, direct inflation targeting is an appropriate monetary regime before the eventual adoption of the euro.
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Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number
1232.
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Date of creation: Oct 2006Date of revision:
Handle: RePEc:lmu:muenec:1232Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany Phone: +49-(0)89-2180-2219 Fax: +49-(0)89-2180-3900 Web page: http://www.vwl.uni-muenchen.de More information through EDIRC
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Keywords: Money demand ; panel unit root tests ; panel cointegration ; direct inflation targeting ; CEECs ; Other versions of this item:
Find related papers by JEL classification: E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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