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A Cointegration And Error Correction Approach To Demand For Money In Fiji: 1971-2002

Author

Listed:
  • B Bhaskara Rao

    (University of the South Pacific)

  • Rup Singh

    (University of the South Pacific)

Abstract

Demand for money is an important macroeconomic relationship. Its stability has implications for the choice of monetary policy targets. This paper estimates demand for narrow money in Fiji and evaluates its robustness and stability. It is found that there is a well determined stable demand for money in Fiji, for three decades, from 1971 to 2002 and its dynamics are adequately captured by the cointegration and error- correction models. Income and interest rate elasticities are found to be significant.

Suggested Citation

  • B Bhaskara Rao & Rup Singh, 2005. "A Cointegration And Error Correction Approach To Demand For Money In Fiji: 1971-2002," Macroeconomics 0511012, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0511012
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    References listed on IDEAS

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    Cited by:

    1. B. Bhaskara Rao, 2007. "Estimating short and long-run relationships: a guide for the applied economist," Applied Economics, Taylor & Francis Journals, vol. 39(13), pages 1613-1625.
    2. Lawrence U. Okoye & Alexander E. Omankhanlen & Johnson I. Okoh & Ngozi B. Adeleye & Felix N. Ezeji & Gideon K. Ezu & Benjamin I. Ehikioya, 2021. "Analyzing the Energy Consumption and Economic Growth Nexus in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 378-387.
    3. Nidhal Mgadmi & Helmi Hamdi & Houssem Rachdi, 2016. "Non-Linear Modelling of Money Demand in Tunisia: Evidence from the STAR Model," Economics Bulletin, AccessEcon, vol. 36(4), pages 1975-1985.
    4. Yutaka Kurihara, 2016. "Demand for money under low interest rates in Japan," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(4), pages 12-19, August.
    5. Lee, Chien Chiang & Chang, Chun Ping, 2012. "The Demand for Money in China: A Reassessment Using the Bounds Testing Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 74-94, March.
    6. T. Jayaraman & Chee-Keong Choong, 2009. "How does monetary policy transmission mechanism work in Fiji?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 56(2), pages 145-161, June.
    7. Rup Singh & Saten Kumar, 2010. "Some empirical evidence on the demand for money in the Pacific Island countries," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(3), pages 211-222, August.
    8. T.K. Jayaraman & Chee‐Keong Choong, 2008. "Exchange market pressure in a small Pacific Island country: a study of Fiji: 1975‐2005," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 35(12), pages 985-1004, October.
    9. P K Narayan & S Narayan, 2008. "Estimating the Demand for Money in an Unstable Open Economy: The Case of the Fiji Islands," Economic Issues Journal Articles, Economic Issues, vol. 13(1), pages 71-91, March.

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    More about this item

    Keywords

    Demand for money; Monetary policy; Income and interest rate elasticities; Cointegration; Error correction; Unit roots; Stability.;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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