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Dynamic modelling of the demand for money in Latvia

  • Boriss Siliverstovs

    ()

    (KOF Swiss Economic Institute, ETH Zurich)

This study develops a money demand model for Latvia for the period from 1996 to 2006. The model isspecified in the error-correction form based on a single co-integrating vector between real money balances, gross domestic product, long-term interest rate, and the rate of inflation. The model meets all three requirements for ‘stability’ put forward in Judd and Scadding (1982). The model is both well-specified and highly parsimonious. It demonstrates high explanatory power in sample as well as accurately forecasting real money balances out of sample.

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Article provided by Baltic International Centre for Economic Policy Studies in its journal Baltic Journal of Economics.

Volume (Year): 8 (2008)
Issue (Month): 1 (October)
Pages: 53-74

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Handle: RePEc:bic:journl:v:8:y:2008:i:1:p:53-74
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  25. Andreea Andronescu & Hassan Mohammadi & James Payne, 2004. "Long-run estimates of money demand in Romania," Applied Economics Letters, Taylor & Francis Journals, vol. 11(14), pages 861-864.
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  28. Claudia Buch, 2001. "Money demand in Hungary and Poland," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 989-999.
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