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Some Empirical Evidence on the Quantity Theoretic Proposition of Money in ASEAN-5

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  • Puah, Chin-Hong
  • Habibullah, Muzafar Shah
  • Abu Mansor, Shazali

Abstract

This study examines the international evidence on long-run neutrality (LRN) of money based on low frequency data from five emerging ASEAN economies, namely, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, using a nonstructural reduced-form bivariate ARIMA model proposed by Fisher and Seater (1993). Empirical evidence shows that the classical proposition cannot be rejected with respect to real export except for Thailand. However, the LRN test results are not robust to changes in money supply in countries under study with respect to real output. The narrow monetary aggregate seems to have greater impact on Indonesia, Malaysia, and Thailand economic activities as compared to the other two countries.

Suggested Citation

  • Puah, Chin-Hong & Habibullah, Muzafar Shah & Abu Mansor, Shazali, 2008. "Some Empirical Evidence on the Quantity Theoretic Proposition of Money in ASEAN-5," MPRA Paper 31768, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31768
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    Cited by:

    1. Chin-Hong, Puah & Lee-Chea, Hiew, 2010. "Financial Liberalization, Weighted Monetary Aggregates and Money Demand in Indonesia," MPRA Paper 31731, University Library of Munich, Germany.
    2. Sim, Chong Yang, 2021. "A Review on Output-Inflation Trade-off Based on New Classical and New Keynesian Theories," MPRA Paper 105767, University Library of Munich, Germany.
    3. Tang, Maggie May-Jean, 2016. "A Review of the Literature on Monetary Neutrality," MPRA Paper 70113, University Library of Munich, Germany.
    4. Kuek, Tai Hock, 2016. "A Review of Literature on Monetary Neutrality - The case of India," MPRA Paper 71962, University Library of Munich, Germany, revised 13 Jun 2016.
    5. Tang, Maggie May-Jean & Puah, Chin-Hong & Awang Marikan, Dayang-Affizzah, 2013. "Empirical Evidence on the Long-Run Neutrality Hypothesis Using Divisia Money," MPRA Paper 50020, University Library of Munich, Germany.
    6. Wong, Soon-Ming & Loi, Siew-Ling, 2016. "Money Influence on Real Economy Activity: Evidences Review on Japanese Context," MPRA Paper 73559, University Library of Munich, Germany.

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    More about this item

    Keywords

    Long-run neutrality of money; ARIMA model; ASEAN;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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