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Interest Free and Interest-Bearing Money Demand: Policy Invariance and Stability

Listed author(s):
  • Amir Kia

    ()

    (Finance & Economics Department, Utah Valley University)

Registered author(s):

    This paper, using quarterly Iranian data for the period 1966-1998, extends the literature by investigating the stability of the interest-free money demand function. The study also examines the stability of economic agents behavior in demanding interest bearing and interest- free money. It was found that, contrary to interest-bearing demand for money, both short and long run demand for interest-free money functions are stable and their coefficients are invariant with respect to policy and other exogenous shocks, as well as changes in regime.

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    Paper provided by Economic Research Forum in its series Working Papers with number 0214.

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    Length: 19 pages
    Date of creation: 09 May 2002
    Date of revision: 09 May 2002
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:0214
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