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Tests of different monetary aggregates for the monetary models of the exchange rate in five ASEAN countries

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  • Lee Chin
  • Muzafar Shah Habibullah
  • M. Azali

Abstract

This study examines the usefulness of divisia money, relative to simple sum money, for exchange rate modelling in a period of rapid financial deregulation. This comparison is conducted using the monetary model of the exchange rate. In the long-run modelling, the divisia money is significantly superior to simple sum money in the case of Malaysia and the Philippines while indifferent for Indonesia, Singapore and Thailand.

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  • Lee Chin & Muzafar Shah Habibullah & M. Azali, 2009. "Tests of different monetary aggregates for the monetary models of the exchange rate in five ASEAN countries," Applied Economics, Taylor & Francis Journals, vol. 41(14), pages 1771-1783.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:14:p:1771-1783
    DOI: 10.1080/00036840902845517
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