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Testing the quantity theory of money in Greece

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  • Erdal Ozmen

Abstract

This paper investigates whether the Greek data actually support the monetarist hypotheses as argued by Karfakis. The results based on both ARDL and Johansen procedures consistently suggest that money and nominal income (prices) are endogenous for the parameters of the long-run evolution of velocity (real money balances). Thus, the basic postulation of monetarism, the exogeneity of money, appears not to be supported by the Greek data.

Suggested Citation

  • Erdal Ozmen, 2003. "Testing the quantity theory of money in Greece," Applied Economics Letters, Taylor & Francis Journals, vol. 10(15), pages 971-974.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:15:p:971-974
    DOI: 10.1080/1350485032000164044
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    References listed on IDEAS

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    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    3. Mohammad Hashem Pesaran & Yongcheol Shin & Richard J Smith, 1999. "Bounds Testing Approaches to the Analysis of Long Run Relationships," Edinburgh School of Economics Discussion Paper Series 46, Edinburgh School of Economics, University of Edinburgh.
    4. Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
    5. Costas Karfakis, 2002. "Testing the quantity theory of money in Greece," Applied Economics, Taylor & Francis Journals, vol. 34(5), pages 583-587.
    6. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-472, August.
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    Cited by:

    1. Costas Karfakis, 2004. "Testing the quantity theory of money in Greece: reply to Ozmen," Applied Economics Letters, Taylor & Francis Journals, vol. 11(9), pages 541-543.
    2. Serdar Ongan, Ismet Gocer, Ayse Ongan, 2022. "Revisiting the quantity theory of money in Euro Area: the case of Greece," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(1), pages 63-77, June.
    3. Serdar Ongan, Ismet Gocer, Ayse Ongan, 2022. "Revisiting the quantity theory of money in Euro Area: the case of Greece," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(1), pages 63-77, June.

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