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How stable is the demand for money in African countries?
- Source :
-
Journal of Economic Studies . 2009, Vol. 36 Issue 3, p216-235. 20p. 4 Charts. - Publication Year :
- 2009
-
Abstract
- Purpose - Studies that have addressed the stability of the demand for money in African countries are rare. A few papers have addressed the' issue in a small number of individual countries. For cross-country comparison, this paper aims to investigate the stability of the M2 demand for money in 21 African countries using quarterly data over the period 1971Q1.2004Q3. Designlmethodology/approach - A standard money demand function is designed. It is estimated using a bounds testing approach to co-integration and error-correction modeling. Findings - Application of the CUSUIVI and CUSUMSQ tests to the residuals of error-correction models reveals that in almost all 21 countries, M2 demand for money is stable. This could be due to incorporating the short-run adjustment process in testing for the stability of the long-run elasticity estimates. Research limitations/implications - Due to data limitations, the study could not be extended to all countries in Africa. Originality/value - This is the most comprehensive study in the literature for Africa. [ABSTRACT FROM AUTHOR]
- Subjects :
- *DEMAND for money
*ERROR-correcting codes
*ELASTICITY (Economics)
*MONEY supply
Subjects
Details
- Language :
- English
- ISSN :
- 01443585
- Volume :
- 36
- Issue :
- 3
- Database :
- Academic Search Index
- Journal :
- Journal of Economic Studies
- Publication Type :
- Academic Journal
- Accession number :
- 44981212
- Full Text :
- https://doi.org/10.1108/01443580910983825