Estimating Money Demand Function in Cambodia: ARDL Approach

Sovannroeun Samreth

MPRA Paper from University Library of Munich, Germany

Abstract: This paper empirically estimates the money demand function in Cambodia. We adopt the money demand model that includes exchange rate. For the analysis, Autoregressive Distributed Lag (ARDL) approach to cointegration is employed. Our results indicate that there is cointegration among variables in money demand function. CUSUM and CUSUMSQ tests roughly support the stability of estimated model. However, in the long-run, even the sign of estimated coefficient of exchange rate support the currency substitution phenomenon in Cambodia, it fails t-test. This may be due to the mix of both currency substitution and wealth effects in the long-run.

Keywords: Money Demand; M1; Cambodia; Currency Substitution (search for similar items in EconPapers)
JEL-codes: C32 E41 E50 F41 (search for similar items in EconPapers)
Date: 2008, Revised 2009-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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