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On the Stability of Money Demand in Ghana: A Bounds Testing Approach
Author: Mr. Arto Kovanen and Jihad Dagher
Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 273
Language:
English
Publication Date:
01 Nov 2011
DOI:
https://doi.org/10.5089/9781463925284.001
ISBN:
9781463925284
ISSN:
1018-5941
Pages:
18
Keywords:
WP; interest rate; money demand relation; money demand function; monetary policy implementation; money demand study; money demand; bounds testing; stability; Ghana; money demand equation; money demand stability; income elasticity; Demand for money; Monetary base; Personal income; Nominal effective exchange rate; Bank deposits; Africa
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper adopts the bounds testing procedure developed by Pesaran et al. (2001) to test the stability of the long-run money demand for Ghana. The results provide strong evidence for the presence of a stable, well-identified long-run money demand during a period of substantial changes in the financial markets. The empirical evidence points to complex dynamics between money demand and its determinants while suggesting that deviations from the equilibrium are rather short-lived.1
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund