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Dynamic Modelling of the Demand for Money in Latvia

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  • Boriss Siliverstovs

Abstract

This study develops a parsimonious stable coefficient money demand model for Latvia for the period from 1996 till 2005. A single cointegrating vector between the real money balances, the gross domestic product, the long-term interest rate, and the rate of inflation is found. Our study contributes to better understanding of the factors shaping the demand for money in the new Member States of the European Union that committed themselves to adopting of the Euro currency in the near future.

Suggested Citation

  • Boriss Siliverstovs, 2007. "Dynamic Modelling of the Demand for Money in Latvia," Discussion Papers of DIW Berlin 703, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp703
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    References listed on IDEAS

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    Cited by:

    1. Claudiu Albulescu & Dominique P'epin, 2016. "The loss of interest for the euro in Romania," Papers 1609.01900, arXiv.org.
    2. Masudul Hasan Adil & Salman Haider & Neeraj R. Hatekar, 2020. "Empirical Assessment of Money Demand Stability Under India’s Open Economy: Non-linear ARDL Approach," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(4), pages 891-909, December.
    3. Nitin, Arora & Asghar, OsatiEraghi, 2016. "Does India have a stable demand for money function after reforms? A macroeconometric analysis," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 44, pages 25-37.
    4. Boriss Siliverstovs, 2008. "Dynamic modelling of the demand for money in Latvia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 8(1), pages 53-74, October.
    5. C. T. Albulescu & D. Pépin, 2019. "The money demand and the loss of interest for the euro in Romania," Applied Economics Letters, Taylor & Francis Journals, vol. 26(3), pages 196-201, February.
    6. Claudiu Albulescu & Dominique Pépin, 2016. "The loss of interest for the euro in Romania," Working Papers hal-01361214, HAL.

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    More about this item

    Keywords

    M2 money demand; stability; new EU member states; Latvia;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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