ARE THE DETERMINANTS OF MONEY DEMAND STABLE IN SELECTED COUNTRIES FROM SOUTHEASTERN EUROPE?

Jordan Kjosevski () and Mihail Petkovski
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Jordan Kjosevski: Moneymax Financial, Ohrid Republic of Macedonia.
Mihail Petkovski: Financial Management, Faculty of Economics, Ss Cyril and Methodius University in Skopje, Republic of Macedonia

Journal for Economic Forecasting, 2017, issue 4, 84-96

Abstract: The purpose of this article is to examine the long and short-run determinants of money demand (M1) and their stability in the seven Southeast European (SEE) countries using monthly data from January 2005 to December 2014. The Pool Mean Group Estimation of ARDL was used to find the long-run and short-run dynamic relationships in money demand model. Empirical results provide the evidence that index of industrial production, exchange rate and dummy variable of effect of the European debt crisis explain the most variations of money demand in the long-run, while exchange rate is significant only in short-run. Our findings also show that real money demand in the SEE countries, despite their turbulent transition from socialist to market economy, was relatively stable in the analyzed period.

Keywords: money demand; determinants; Southeast Europe; panel ARDL (search for similar items in EconPapers)
JEL-codes: C12 C33 E41 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2017:i:4:p:84-96

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