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Monetary Uncertainty and Demand for Money in Korea

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  • Mohsen Bahmani-Oskooee

    (The Center for Research on International Economics, The Department of Economics, University of Wisconsin-Milwaukee, Milwaukee)

  • Sahar Bahmani

    (Department of Economics, University of Wisconsin-Parkside, Kenosha)

Abstract

Friedman’s volatility hypothesis asserts that increased volatility of money supply can lower the velocity of money or increase the demand for money. Previous studies have tested this hypothesis by using data from a few industrialized countries. In this paper, we estimate the demand for money in Korea after including a measure of volatility of nominal money supply. We provide support for Friedman’s hypothesis in the short run as well as in the long run.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Sahar Bahmani, 2014. "Monetary Uncertainty and Demand for Money in Korea," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(3), pages 317-324, March.
  • Handle: RePEc:asi:aeafrj:2014:p:317-324
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    References listed on IDEAS

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    1. Koi Nyen Wong & Tuck Cheong Tang, 2008. "The effects of exchange rate variability on Malaysia's disaggregated electrical exports," Journal of Economic Studies, Emerald Group Publishing, vol. 35(2), pages 154-169, May.
    2. Bahmani-Oskooee Mohsen & Shin Sungwon, 2002. "Stability of the Demand for Money in Korea," International Economic Journal, Taylor & Francis Journals, vol. 16(2), pages 85-95.
    3. Paresh Kumar Narayan & Seema Narayan & Biman Chand Prasad & Arti Prasad, 2007. "Export-led growth hypothesis: evidence from Papua New Guinea and Fiji," Journal of Economic Studies, Emerald Group Publishing, vol. 34(4), pages 341-351, September.
    4. Mohsen Bahmani-Oskooee & Scott W. Hegerty, 2009. "The Effects of Exchange-Rate Volatility on Commodity Trade between the United States and Mexico," Southern Economic Journal, Southern Economic Association, vol. 75(4), pages 1019-1044, April.
    5. Sahar Bahmani, 2008. "Stability of the Demand for Money in the Middle East," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(1), pages 62-83, January.
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