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Stability of the money demand function: evidence from Ghana

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  • Samuel Andoh
  • David Chappell

Abstract

This paper estimates the demand for money (M2) in Ghana for the period 1960 to 1996. The hypothesis is that the different macroeconomic adjustment policies (privatization, removal of foreign exchange controls etc.) which began in the mid 1980s would alter the demand for money function. The results of the study clearly show a structural break in the demand for money function in 1983.

Suggested Citation

  • Samuel Andoh & David Chappell, 2002. "Stability of the money demand function: evidence from Ghana," Applied Economics Letters, Taylor & Francis Journals, vol. 9(13), pages 875-878.
    • Handle: RePEc:taf:apeclt:v:9:y:2002:i:13:p:875-878
    DOI: 10.1080/13504850210158971
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    References listed on IDEAS

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    1. Butkiewicz, James L. & McConnell, Margaret Mary, 1995. "The stability of the demand for money and M1 velocity: Evidence from the sectoral data," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(3), pages 233-243.
    2. Miquel Faig, 1989. "Seasonal Fluctuations and the Demand for Money," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 847-861.
    3. Howells, Peter & Hussein, Khaled, 1997. "The demand for money: Total transactions as the scale variable," Economics Letters, Elsevier, vol. 55(3), pages 371-377, September.
    4. Honohan, Patrick, 1994. "Inflation and the demand for money in developing countries," World Development, Elsevier, vol. 22(2), pages 215-223, February.
    5. Mankiw, N Gregory & Summers, Lawrence H, 1986. "Money Demand and the Effects of Fiscal Policies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(4), pages 415-429, November.
    6. Joseph O. Adekunle, 1968. "The Demand for Money: Evidence from Developed and Less Developed Economies (La demande de monnaie: les enseignements des économies développées et moins développées) (La demanda de dinero: comprob," IMF Staff Papers, Palgrave Macmillan, vol. 15(2), pages 220-266, July.
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    Cited by:

    1. R. Scott Hacker & Abdulnasser Hatemi-J, 2005. "The effect of regime shifts on the long-run relationships for Swedish money demand," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1731-1736.
    2. Wen-Hsien Tan & Chin-Hong Puah & Shirly Siew-Ling Wong & Mei-Teing Chong, 2020. "Economic Uncertainty and the Demand for Broad Money in South Africa," Business and Economic Research, Macrothink Institute, vol. 10(2), pages 123-133, June.
    3. Nana Kwame Akosah & Francis W. Loloh & Maurice Omane-Adjepong, 2018. "Justifying the Adoption and Relevance of Inflation Targeting Framework: A Time-Varying Evidence from Ghana," Papers 1805.11562, arXiv.org.
    4. Mr. Andrew Berg & Ms. Filiz D Unsal & Mr. Rafael A Portillo, 2010. "On the Optimal Adherence to Money Targets in a New-Keynesian Framework: An Application to Low-Income Countries," IMF Working Papers 2010/134, International Monetary Fund.
    5. Chen, Rongda & Wei, Bo & Jin, Chenglu & Liu, Jia, 2021. "Returns and volatilities of energy futures markets: Roles of speculative and hedging sentiments," International Review of Financial Analysis, Elsevier, vol. 76(C).
    6. Tiago Neves Sequeira & Marcelo Santos, 2015. "Labour Market Returns and Wage Inequality: New Evidence for Europe," Research in Applied Economics, Macrothink Institute, vol. 7(3), pages 31-45, September.
    7. Ferda HALICIOGLU & Mehmet UGUR, 2005. "On Stability of the Demand for Money in a Developing OECD," Macroeconomics 0508001, University Library of Munich, Germany.
    8. BigBen Chukwuma Ogbonna, 2015. "Exchange Rate and Demand for Money in Nigeria," Research in Applied Economics, Macrothink Institute, vol. 7(2), pages 21-37, June.
    9. Mr. Arto Kovanen, 2011. "Does Money Matter for Inflation in Ghana?," IMF Working Papers 2011/274, International Monetary Fund.

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