The Demand for Money in Sierra Leone Revisited

Kelfala M. Kallon

Journal of African Development, 2009, vol. 11, issue 1, 41-59

Abstract: This paper uses Johansen's cointegration methodology to estimate Sierra Leone's money long-run demand function for the 1964-2005 period. It finds a stable long-run relationship between the quantity of real money balances and its determinants. Secondly, all the estimated coefficients have their expected signs. Additionally, as expected in economies with under-developed financial systems, Sierra Leone's long-run money demand function is unit income-elastic and interest-rate inelastic. Thus, the study provides support for the neoclassical money demand specification. Additionally, it reaffirms the central findings of Kallon (1992).

Keywords: Sierra Leone; money demand; cointegration analysis (search for similar items in EconPapers)
Date: 2009
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