A NONLINEAR SPECIFICATION OF DEMAND FOR NARROW MONEY IN COLOMBIA

Luis Arango Thomas and Andres Gonzalez

No 1894, Borradores de Economia from Banco de la Republica

Abstract: A nonlinear smooth transition regressíon (STR) model of the demand for narrow in Colombia is specified using montly 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 higly 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 (search for similar items in EconPapers)
JEL-codes: E41 (search for similar items in EconPapers)
Pages: 26
Date: 1999-10-31
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Related works:
Working Paper: A Nonlinear Specification of Demand for Narrow Money in Colombia (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:001894

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