Empirical Evidence For A Money Demand Function: A Panel Data Analysis Of 27 Countries In 1988-98
The purpose of this paper is to estimate the money demand function of Cagan (1956) using a panel data set covering 27 countries with different economic levels over the period 1988-98. The static fixed effects and the dynamic fixed effects reveal that a money demand equation exists. However, in contrast to the theory proposed by Cagan, estimates of the output elasticity of money demand are in the range from 0.18 to 0.20.
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Volume (Year): 6 (2006)
Issue (Month): 1 ()
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