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Post stabilization estimates of money demand in Croatia: error correction model using the bounds testing approach

  • James Payne

This paper estimates an error correction model of money demand for Croatia over the post-stabilization period based on the ARDL bounds testing procedure. While industrial production is statistically insignificant for both the M1 and M1A money demand specifications, interest rates, inflation, and the real effective exchange rate have a negative and statistically significant impact. The error correction money demand models appear structurally stable based on the cumulative sum and cumulative sum of square tests.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000152871
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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 16 ()
Pages: 1723-1727

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Handle: RePEc:taf:applec:v:35:y:2003:i:16:p:1723-1727
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  1. R. Golinelli & R. Orsi, 2001. "Hungary and Poland," Working Papers 424, Dipartimento Scienze Economiche, Universita' di Bologna.
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  9. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
  10. Bahmani-Oskooee, Mohsen & Shabsigh, Ghiath, 1996. "The demand for money in Japan: Evidence from cointegration analysis," Japan and the World Economy, Elsevier, vol. 8(1), pages 1-10, March.
  11. Payne, James E., 2002. "Inflationary dynamics of a transition economy: the Croatian experience," Journal of Policy Modeling, Elsevier, vol. 24(3), pages 219-230, June.
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