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Stability of the Demand for Money in the Middle East

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  • Sahar Bahmani

Abstract

Previous studies that have estimated the money demand function in Middle Eastern countries employed either traditional estimation techniques or recently popularized cointegration techniques. The first group suffers from spurious regression problems; the second group interprets cointegration as a sign of stability of the estimated parameters. Without a comprehensive study in the literature about the Middle East, this paper incorporates the cumulative sum and cumulative sum squared tests into cointegration analysis and shows that in the majority of the countries in the sample, the demand for money (M2) is stable.

Suggested Citation

  • Sahar Bahmani, 2008. "Stability of the Demand for Money in the Middle East," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(1), pages 62-83, January.
  • Handle: RePEc:mes:emfitr:v:44:y:2008:i:1:p:62-83
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    References listed on IDEAS

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    Cited by:

    1. Claudiu Tiberiu Albulescu & Dominique Pépin, 2018. "Money demand stability, monetary overhang and inflation forecast in the CEE countries," Working Papers hal-01720319, HAL.
    2. Sahar Bahmani & Ali Kutan, 2010. "How stable is the demand for money in emerging economies?," Applied Economics, Taylor & Francis Journals, vol. 42(26), pages 3307-3318.
    3. Zheng, Hualu & Muhammad, Andrew & Herndon, Cary W., Jr., 2009. "The Impacts of Ethanol on the US Catfish Farm Sector," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46248, Southern Agricultural Economics Association.
    4. repec:sgh:erfinj:v:2:y:2017:i:2:p:79-97 is not listed on IDEAS
    5. Kumar, Saten, 2011. "Financial reforms and money demand: Evidence from 20 developing countries," Economic Systems, Elsevier, vol. 35(3), pages 323-334, September.
    6. Mohsen Bahmani-Oskooee & Sahar Bahmani, 2014. "Monetary Uncertainty and Demand for Money in Korea," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(3), pages 317-324, March.

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    Keywords

    bounds testing; Middle East; money demand; stability;

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