Economics at your fingertips  

Long-run Money Demand in Latin American Countries: A Nonstationary Panel Data Approach

Cesar Carrera ()

Monetaria, 2016, vol. IV, issue 1, 121-152

Abstract: Central banks have long been interested in obtaining precise estimations of money demand given the fact that its evolution plays a key role over several monetary variables and the stability of the financial system. I use Pedroni’s (2002) fully modified ordinary least squares (FMOLS) to estimate the coefficients of the long-run money demand for 15 Latin American countries. The FMOLS technique pools information regarding common long-run relations while allowing the associated short-run dynamics and fixed effects to be heterogeneous across different economies of the panel. For this group of countries, I find evidence of a cointegrating money demand, an income elasticity of 0.94, and an interest rate semielasticity of -0.01.

Keywords: money demand; panel cointegration; fmols; Latin America (search for similar items in EconPapers)
JEL-codes: C22 C23 E41 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
Working Paper: Long-Run Money Demand in Latin-American countries: A Nonestationary Panel Data Approach (2012) Downloads
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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Monetaria from Centro de Estudios Monetarios Latinoamericanos, CEMLA Contact information at EDIRC.
Bibliographic data for series maintained by Ana Laura Sibaja-Jiménez ().

Page updated 2021-11-21
Handle: RePEc:cml:moneta:v:iv:y:2016:i:1:p:121-152