Interest Free and Interest-Bearing Money Demand: Policy Invariance and Stability
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.
|Date of creation:||May 2002|
|Date of revision:||May 2002|
|Publication status:||Published by The Economic Research Forum (ERF)|
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