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The Effect of Financial Innovations in Bank Sector on Money Demand in Iran (in Persian)

Author

Listed:
  • Biabani, Jahangir

    (Iran)

  • Abolhasani, Asghar

    (Iran)

  • Mehregan, Nader

    (Iran)

  • Hasanvand, Darush

    (Iran)

Abstract

In this study, the Relation of money innovations and money demand in Iran in the form of time series between 1959 and 2010 by ARDL method has been tested. Financial Innovations is a broad concept in Money Substitution whose main part is formed in bank section. Here, focusing on bank part (section), the effect of financial innovations on money demand is examined. Results show that in a given period in spite of Financial Innovations money demand is stable. Here are long run relations and consequently short – run dynamic adjustment toward equilibrium between money demand and inflation rate variable, GDP and Financial Innovations. Financial Innovations has negative effect on money demand in short and long run as a focused variable of the current study. The speed of model adjustment toward long–run one in both models is low. Also short-run elasticity of Financial Innovations is more than long run one.

Suggested Citation

  • Biabani, Jahangir & Abolhasani, Asghar & Mehregan, Nader & Hasanvand, Darush, 2014. "The Effect of Financial Innovations in Bank Sector on Money Demand in Iran (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(18), pages 131-155, March.
    • Handle: RePEc:mbr:jmbres:v:6:y:2014:i:18:p:131-155
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    More about this item

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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