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Reassessing The Stability of Broad Money Demand in Malaysia

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  • Muhd-Zulkhibri Abdul Majid

    (Central Bank of Malaysia)

Abstract

This paper re-examines the money demand in Malaysia covering the period from 1974 to 2001, a period characterised by various events particularly the financial sector liberalisation, changes in monetary framework and currency crises. Our results support the existence of fairly stable long-run money demand function despite the various changes and developments in the economy. However, there is an evidence of instability in short-run money demand. On this ground, the monetary targeting framework in Malaysia seems to be appropriate at least in the 1990s and monetary aggregate continue to be a useful longer-term indicator in the formulation of monetary policy.

Suggested Citation

  • Muhd-Zulkhibri Abdul Majid, 2004. "Reassessing The Stability of Broad Money Demand in Malaysia," Macroeconomics 0405020, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0405020
    Note: Type of Document - pdf; pages: 30
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    References listed on IDEAS

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    Cited by:

    1. Indranarain Ramlall, 2012. "Broad Money Demand in Mauritius with Implications for Monetary Policy," Journal of Economics and Behavioral Studies, AMH International, vol. 4(8), pages 436-448.
    2. Nabiddo, Winnie, 2007. "The analysis of money demand for Uganda (1986:1-2003:4)," Occasional Papers 54936, Economic Policy Research Centre (EPRC).
    3. John Bosco Nnyanzi, 2018. "The Interaction Effect of Financial Innovation and the Transmission Channels on Money Demand in Uganda," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(12), pages 1-1, December.
    4. Ahmad, Mahyudin, 2008. "The effect of financial deregulation on money demand in Malaysia," MPRA Paper 42295, University Library of Munich, Germany.

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    More about this item

    Keywords

    money demand; cointegration; error-correction; Malaysia;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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