Estimating Money Demand Functions for South Asian Countries

Posted: 10 Jun 2012

See all articles by Paresh Kumar Narayan

Paresh Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Seema Narayan

affiliation not provided to SSRN

Vinod Mishra

Monash Business School

Date Written: 2009

Abstract

In this paper, we estimate a money demand function for a panel of five South Asian countries. We find that the money demand and its determinants, namely real income, real exchange rate and short-term domestic and foreign interest rates are cointegrated both for individual countries as well as for the panel, and panel long-run elasticities provide robust evidence of statistically significant relationships between money demand and its determinants. Our test for panel Granger causality suggests short-run causality running from all variables, except foreign interest rate, to money demand, and we find evidence that except for Nepal money demand functions are stable Asian countries

Suggested Citation

Narayan, Paresh Kumar and Narayan, Seema and Mishra, Vinod, Estimating Money Demand Functions for South Asian Countries (2009). Empirical Economics, Vol. 36, pp. 685-696, 2009, Available at SSRN: https://ssrn.com/abstract=2080582

Paresh Kumar Narayan (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Seema Narayan

affiliation not provided to SSRN ( email )

Vinod Mishra

Monash Business School ( email )

Monash University
Clayton, Victoria 3800
Australia
+61 03 99050038 (Phone)

HOME PAGE: http://users.monash.edu.au/~mishra/

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