A Nonlinear Specification of Demand for Narrow Money in Colombia

Luis Arango Thomas and Andres Gonzalez

Borradores de Economia from Banco de la Republica de Colombia

Abstract: A nonlinear smooth transition regression(STR) model of the demand for narrow money in Colombia is specified using monthly data for cash, prices, the scale variable (industrial GDP), the interest rate and the rate of depreciation, within the single equation framework allowed by the data. In comparison with linear error correction model, the nonlinear specification is highly superior according to the statistics. The dynamics described by this model matches both the magnitudes and the behaviour of the aggregate demand for narrow money in Colombia during the sample period (1980.5-1998.11).

Keywords: error correction; demand for money; target-bounds; buffer stocks; nonlinearity; smooth transition regression. (search for similar items in EconPapers)
JEL-codes: C22 C52 E41 (search for similar items in EconPapers)
Date: 1999-10
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.32468/be.135 (application/pdf)

Related works:
Working Paper: A NONLINEAR SPECIFICATION OF DEMAND FOR NARROW MONEY IN COLOMBIA (1999)
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: https://EconPapers.repec.org/RePEc:bdr:borrec:135

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica de Colombia Cra 7 # 14-78. Contact information at EDIRC.
Bibliographic data for series maintained by Clorith Angélica Bahos Olivera ().