Monetary Targeting in Pakistan: A Skeptical Note
AbstractThe objective of this study is to evaluate monetary targeting strategy in Pakistan by testing the Quantity Theory of Money and the income velocity of money stated by Monetarists and the endogenous money hypothesis postulated by the Post Keynesians. Our tests on the Pakistani data covering about thirty years reveal that the quantity theory is an inadequate explanation of inflation, income velocity of money is unstable, and money is endogenous. These results suggest rethinking on monetary targeting strategy in Pakistan.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14883.
Date of creation: 05 Jun 2008
Date of revision:
Monetary Targeting; QTM; Income Velocity of Money; Endogenous Money;
Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-CWA-2009-05-02 (Central & Western Asia)
- NEP-MAC-2009-05-02 (Macroeconomics)
- NEP-MON-2009-05-02 (Monetary Economics)
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