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Currency Substitution: A Case Of Kazakhstan (2000:1-2007:12)


  • Mesut Yilmaz


  • Yessengali Oskenbayev


  • Kanat Abdulla



This paper aims to investigate the demand for money in Kazakhstan. This study covers the period starting from 2000:01, when capital liberalization program was launched and National Bank approved managed float regime (National Bank employed adjustable exchange rate regime before exchange rate crisis in Kazakhstan in 1999) to 2007:12 as recent available data for investigation variables. In order to achieve the goal we set demand for money function is estimated using cointegration methodology aimed for variables integrated of order one. The results show important key factors for controlling money demand could be applied by National Bank of Kazakhstan. Besides, there was reversal of currency in Kazakhstan over the period under the investigation.

Suggested Citation

  • Mesut Yilmaz & Yessengali Oskenbayev & Kanat Abdulla, 2009. "Currency Substitution: A Case Of Kazakhstan (2000:1-2007:12)," William Davidson Institute Working Papers Series wp946, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2009-946

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    References listed on IDEAS

    1. Oomes, Nienke & Ohnsorge, Franziska, 2005. "Money demand and inflation in dollarized economies: The case of Russia," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 462-483, September.
    2. Cheung, Yin-Wong & Lai, Kon S., 1997. "Bandwidth Selection, Prewhitening, and the Power of the Phillips-Perron Test," Econometric Theory, Cambridge University Press, vol. 13(05), pages 679-691, October.
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    Cited by:

    1. Huseynov, Salman & Ahmadov, Vugar, 2012. "Currency substitution in an oil-rich CIS country: The case of Azerbaijan," MPRA Paper 70701, University Library of Munich, Germany.

    More about this item


    Demand for money; currency substitution; dollarization; Kazakhstan;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money


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