Money Demand in the Dominican Republic

Alan A. Carruth and José R. Sánchez-Fung ()

Studies in Economics from Department of Economics, University of Kent

Abstract: This paper investigates a demand for money relationship for the dominican Republic. The financial system of the Dominican Republic is underdeveloped, and there are no suitable domestic data on the opportunity cost of holding money. Economic links with the US suggest a possible role for a foreign interest rate effect and a currency substitution effect in the demand for domestic money. A long-run demand for money-relationship is developed from the perspective of alternative estimation methodologies, and it is shown that a "literature standard" specification augmented by foreign monetary variables is robust. The ensuing short-run dynamic model is adequate, stable and suggests an important role for expected inflation, and a real bilateral exchange rate with the US. A number of policy implications for the Dominican Republic are drawn from the results.

Keywords: Demand for money; cointegration; Dominican Republic (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Date: 1997-11
View citations in EconPapers

Forthcoming in Applied Economics, 2000

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Money Demand in the Dominican Republic (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ukc:ukcedp:9709

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Studies in Economics from Department of Economics, University of Kent
Address: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Series data maintained by Emma Robinson ().