Money, Inflation and output in Romania, 1992-2000

Nina Budina, Wojtek Maliszewski, George de Menil and Geomina Turlea

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: Money, inflation and output are tested for stationarity, and found to be integrated of order one. We apply the Johansen procedure for cointegration to test for the rank of the matrix of cointegrating relations (one), to test for the weak exogeneity of output (accepted), inflation (rejected) and money (rejected). We interpret the unique cointegrating relationship as an extended Cagan money demand equation, and estimate error correction mechanisms, in which excess supply of real money contributes significantly to the short-run dynamics of inflation and real money. The evidence suggests than in the period considered, including the sub-sample between the liberalisation shocks, inflation was largely a monetary phenomenon.

Date: 2002
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Related works:
Journal Article: Money, inflation and output in Romania, 1992-2000 (2006)
Working Paper: Money, inflation and output in Romania, 1992-2000 (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:del:abcdef:2002-15

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