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Dynamic Modelling of the Demand for Money in Latvia

  • Boriss Siliverstovs

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.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 703.

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Length: 23 p.
Date of creation: 2007
Date of revision:
Handle: RePEc:diw:diwwpp:dp703
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  6. 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.
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  8. Dreger, Christian & Reimers, Hans-Eggert & Roffia, Barbara, 2006. "Long-run money demand in the new EU Member States with exchange rate effects," Working Paper Series 0628, European Central Bank.
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  27. Sargent, Thomas J & Wallace, Neil, 1975. ""Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 241-54, April.
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