A DYNAMIC MODEL OF THE MONEY DEMAND IN ROMANIA

Cornelia Scutaru () and Elena Pelinescu

Journal for Economic Forecasting, 2001, issue 1, pages 32-47

Abstract: The purpose of this paper is to offer an effective instrument for the simulation and research of money demand and its determinants, with a focus on the short-term impact of changes in parameters of monetary, foreign exchange and wage policies as well the impact of external shocks. Taking into account the weak structure of the Romanian economy, Dobrescu (1997), the authors confined the study to testing the model for short-term forecasts. In order to test the validity of the model, the results of the model were compared with the real developments in the first three months of this year and with values obtained through other models. Generally, the data estimated by using the model revealed the trend accurately, the deviations from real values being larger in the case of real variables due to the shocks and to the behavior of the economic agents in response to these shocks.

Keywords: money demand; monetary shocks; wage policies; forecasting (search for similar items in EconPapers)
JEL-codes: E41 E37 E52 (search for similar items in EconPapers)
Date: 2001

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Persistent link: http://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2001:i:1:p:32-47

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