IDEAS home Printed from https://ideas.repec.org/a/eaa/aeinde/v7y2007i1_19.html
   My bibliography  Save this article

Causality Link Between Money, Output And Prices In Malaysia: An Empirical Re-Examination

Author

Listed:
  • MUHD-ZULKHIBRI, Abdul Majid

Abstract

This paper re-examines the causality relationship between monetary aggregates, output and prices in the case of Malaysia. The study is based upon a vector autoregression (VAR) model applying the Granger no-causality procedure developed by Toda and Yamamoto (1995). The results indicate a two-way causality running between monetary aggregates, M2 and M3 and output which is consistent with theoretically conjecture by Keynesian and Monetarist views whereas there is a one-way causality running from monetary aggregate, M1 and output. In addition, the results suggest that all monetary aggregates have a strong one-way causality running from money to prices but no evidence for the opposite causality. Thus, the results add the empirical support to the argument in the literature that inflation is a monetary phenomenon.

Suggested Citation

  • MUHD-ZULKHIBRI, Abdul Majid, 2007. "Causality Link Between Money, Output And Prices In Malaysia: An Empirical Re-Examination," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
  • Handle: RePEc:eaa:aeinde:v:7:y:2007:i:1_19
    as

    Download full text from publisher

    File URL: http://www.usc.es/economet/journals1/aeid/aeid7119.pdf
    Download Restriction: Access restricted to subscribers. Free on line subscription for universities from low income countries. More information at http://www.usc.es/economet/info.htm

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. P., Srinivasan & M., Kalaivani, 2013. "On the Temporal Causal Relationship between Macroeconomic Variables: Empirical Evidence from India," MPRA Paper 46803, University Library of Munich, Germany.

    More about this item

    Keywords

    money-output; causality; Toda-Yamamoto; prices;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eaa:aeinde:v:7:y:2007:i:1_19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (M. Carmen Guisan). General contact details of provider: http://www.usc.es/economet/eaa.htm .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.