Anticipated Money, Unanticipated Money and Output Variations in Singapore
This paper examines the effectiveness of anticipated and unanticipated money in the variations of output in Singapore over the periods 1971-72 to 2007-08. The study has found that money supply and output in Singapore are cointegrated. No cointegration is found between output and anticipated money. Short-run dynamics of the cointegrated variables testifies that money supply of the immediate past period leads to rise in output. The study also examines the invariance proposition of rational expectations and found the evidence that the unanticipated part of money supply has significant role in the variations of output growth. Therefore monetary surprises may be successful in promoting output growth.
Volume (Year): 9 (2011)
Issue (Month): 1 ()
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- Stock, James H. & Watson, Mark W., 1989. "Interpreting the evidence on money-income causality," Journal of Econometrics, Elsevier, vol. 40(1), pages 161-181, January.
- Krol, Robert & Ohanian, Lee E., 1990. "The impact of stochastic and deterministic trends on money-output causality : A multi-country investigation," Journal of Econometrics, Elsevier, vol. 45(3), pages 291-308.
- James Peery Cover, 1992. "Asymmetric Effects of Positive and Negative Money-Supply Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1261-1282.
- Ghani, Ejaz, 1991. "Rational expectations and price behavior : A study of India," Journal of Development Economics, Elsevier, vol. 36(2), pages 295-311, October.
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, April.
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