Modeling Turkish M2 broad money demand: a portfolio-based approach using implications for monetary policy
Levent Korap ()
MPRA Paper from University Library of Munich, Germany
Abstract:
In this paper, a money demand model upon M2 broad monetary aggregate for the Turkish economy is examined in a portfolio-based approach considering various alternative cost measures to hold money. Employing multivariate co-integration methodology of the same order integrated variables, our estimation results indicate that there exists a theoretically plausible co-integrating vector in the long-run money demand variable space. The main alternative costs to demand for money are found as the depreciation rate of domestic currency and the course of equity prices, for which the former brings out the importance of currency substitution phenomenon settled in the economy. Besides, we find that domestic inflation carries a weakly exogenous characteristic and conclude that the main factors leading to the domestic inflation are determined out of the money demand variable space.
Keywords: Broad money; co-integration; currency substitution; Turkish economy (search for similar items in EconPapers)
JEL-codes: C32 E41 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:
Published in Selçuk Üniversitesi İktisadi ve İdari Bilimler Fakültesi Sosyal ve Ekonomik Araştırmalar Dergisi 15.9(2008): pp. 1-13
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/19703/1/MPRA_paper_19703.pdf original version (application/pdf)
Related works:
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:pra:mprapa:19703
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().