On the Stability of Money Demand in Ghana: A Bounds Testing Approach

Arto Kovanen and Jihad Dagher

No 2011/273, IMF Working Papers from International Monetary Fund

Abstract: 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

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 (search for similar items in EconPapers)
Pages: 18
Date: 2011-11-01
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Citations: View citations in EconPapers (18)

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