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Monetary Targeting in Pakistan: A Skeptical Note

Omar Saqib () and Muhammad Omer ()

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this study is to evaluate monetary targeting strategy in Pakistan by testing the Quantity Theory of Money and the income velocity of money stated by Monetarists and the endogenous money hypothesis postulated by the Post Keynesians. Our tests on the Pakistani data covering about thirty years reveal that the quantity theory is an inadequate explanation of inflation, income velocity of money is unstable, and money is endogenous. These results suggest rethinking on monetary targeting strategy in Pakistan.

Keywords: Monetary Targeting; QTM; Income Velocity of Money; Endogenous Money (search for similar items in EconPapers)
JEL-codes: E58 E52 E5 (search for similar items in EconPapers)
Date: 2008-06-05
New Economics Papers: this item is included in nep-cwa, nep-mac and nep-mon
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Related works:
Journal Article: Monetary Targeting in Pakistan: A Skeptical Note (2009) Downloads
Working Paper: Monetary Targeting in Pakistan: A Skeptical Note (2008) Downloads
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