A Cointegration And Error Correction Approach To Demand For Money In Fiji: 1971-2002
AbstractDemand for money is an important macroeconomic relationship. Its stability has implications for the choice of monetary policy targets. This paper estimates demand for narrow money in Fiji and evaluates its robustness and stability. It is found that there is a well determined stable demand for money in Fiji, for three decades, from 1971 to 2002 and its dynamics are adequately captured by the cointegration and error- correction models. Income and interest rate elasticities are found to be significant.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0511012.
Length: 20 pages
Date of creation: 11 Nov 2005
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Demand for money; Monetary policy; Income and interest rate elasticities; Cointegration; Error correction; Unit roots; Stability.;
Find related papers by JEL classification:
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-19 (All new papers)
- NEP-CBA-2005-11-19 (Central Banking)
- NEP-MAC-2005-11-19 (Macroeconomics)
- NEP-MON-2005-11-19 (Monetary Economics)
- NEP-SEA-2005-11-19 (South East Asia)
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