The Determinants and Stability of Real Money Demand in Vietnam, 1999-2009
AbstractUnderstanding the money demand function is highly important for monetary policy implementation, especially in a monetary targeting framework. The paper uses cointegration analysis and a reduced-form short-run error correction model to investigate the demand for money in Vietnam between 1999 and 2009. We find evidence for a cointegrating relationship between the real money demand, income, the foreign interest rate, and the real stock price. More importantly, statistical tests show that real money demand in Vietnam is stable in this period.
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Bibliographic InfoPaper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 10-14.
Length: 19 pages
Date of creation: Sep 2010
Date of revision:
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International Diversification; Utility Maximization; EPF; Hypothetical Worker; Modern Portfolio Theory; Sri Lanka;
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; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-CBA-2010-10-02 (Central Banking)
- NEP-MAC-2010-10-02 (Macroeconomics)
- NEP-MON-2010-10-02 (Monetary Economics)
- NEP-SEA-2010-10-02 (South East Asia)
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