Inflation Uncertainty and Momey Demand: Evidence from a Monetary Regime Changed and the Cases of Greece
This paper has extended a money demand equation to include uncertainty of inflation as a specific argument. The empirical analysis shows that in Greece inflation uncertainty is described well by an ARCH process. A money demand equation that explicitly takes into consideration the inflation uncertainty process seems to be capable of capturing any money demand structural instabilities. These instabilities, in turn, are shown to have been caused by the monetary deregulation process occurred in 1988. [E41, E42]
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Volume (Year): 13 (1999)
Issue (Month): 2 ()
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