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The Demand for Money in Cote d’Ivoire: Evidence from the Cointegration Test

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  • Drama, Bedi Guy Herve
  • Yao, Shen

Abstract

This paper demonstrates that there is a long run equilibrium relationship between money supply 〖(M〗_1) and its main determinants, real income (GDP) and interest rate in Cote d’Ivoire. In order to investigate long-term relationship among these variables, we use Juselius and Johansen cointegration test with time series data covering the period of 1980-2007. The results show that there is long-term relationship among these variables as well as the linkage between them. Base from this result we found that only real money balances 〖(M〗_1) has significant long -run economic impact of variations in monetary policy in Cote d’Ivoire. However, the study also revealed that the effect of aggregate 〖(M〗_2) is not so stable linking with it determinants.

Suggested Citation

  • Drama, Bedi Guy Herve & Yao, Shen, 2010. "The Demand for Money in Cote d’Ivoire: Evidence from the Cointegration Test," MPRA Paper 20131, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20131
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    Cited by:

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    2. Kumar, Saten & Webber, Don J. & Fargher, Scott, 2013. "Money demand stability: A case study of Nigeria," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 978-991.
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    5. doğru, bülent, 2013. "Dynamic Analysis of Money Demand Function: Case of Turkey," MPRA Paper 48402, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cointegration test; Money demand;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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