Money demand and economic uncertainty in Barbados
AbstractUsing the unrestricted error correction model proposed by Pesaran et al (2001), this paper investigates the relationship between economic uncertainty and money demand in Barbados. Results suggest that in the short run, agents tend to increase money holdings in the face of heightened uncertainty. However, this impact does not carry on into the longer term. Rather, the results suggest that nominal assets may become less attractive during prolonged periods of economic uncertainty.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34561.
Date of creation: 18 Dec 2010
Date of revision:
Money demand; economic uncertainty; Barbados; fixed exchange rate;
Find related papers by 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
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
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