Structural Breaks and the Demand for Money in Fiji

B. Rao and Saten Kumar

MPRA Paper from University Library of Munich, Germany

Abstract: This paper fills a gap in the empirical work on the demand for money for Fiji. We allowed for structural breaks in the cointegrating equation, within the Gregory and Hansen framework, and found that there is a cointegrating relationship between real narrow money, real income and the nominal rate of interest in all the three types of their models. However, only the model with an intercept shift for the 1987 political coup yields a meaningful cointegrating relationship. We tested for its temporal stability and found that the demand for money in Fiji is stable.

Keywords: Structural break; Cointegration; Gregory and Hansen; Demand for money; Fiji (search for similar items in EconPapers)
JEL-codes: E4 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1549

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