Economic Uncertanity and Money Demand Stability in Turkey (Turkiye'de Ekonomik Belirsizlik ve Para Talebinin Istikrari)
The monetary authorities of emerging market economies tend to emphasize the studies that find instabilities in the money demand functions and use them as the main pretext for formulating monetary policy strategies in which monetary aggregates play no prominent role. In this study, however, we attempt to understand the causes of instabilities in the conventional money demand models by accounting for the effects of macroeconomic uncertainty on money holdings. Our results suggest that money balances, income and interest spread are not cointegrated when the VAR system is missing a measure of economic uncertainty. Thus, we find stable long run relations and coefficients when the correct measures of uncertainty are introduced to the system.
|Date of creation:||2010|
|Contact details of provider:|| Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara|
Phone: (90 312) 507 5000
Fax: (90 312) 507 5640
Web page: http://www.tcmb.gov.tr
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:tcb:wpaper:1015. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ozlem Ekmekciler Ramalho Rocha)or (Ilker Cakar)
If references are entirely missing, you can add them using this form.