Dynamic Analysis of Money Demand Function: Case of Turkey
AbstractIn this paper, the dynamic determinants of money demand function and the long-run and short-run relationships between money demand, income and nominal interest rates are examined in Turkey for the time period 1980-2012. In particular we estimate a dynamic specification of a log money demand function based on Keynesian liquidity preference theory to ascertain the relevant elasticity of money demand. The empirical results of the study show that in Turkey inflation, exchange rate and money demand are co-integrated, i.e., they converge to a long run equilibrium point, and money demand function in Turkey.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 48402.
Date of creation: 15 Jan 2013
Date of revision:
Dynamic Ordinary Least Squares; Vector Error Correction; Money Demand Function;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
- NEP-ARA-2013-07-28 (MENA - Middle East & North Africa)
- NEP-CWA-2013-07-28 (Central & Western Asia)
- NEP-MON-2013-07-28 (Monetary Economics)
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