The Stability of Money Demand in South Africa, 1965-1997
Kevin Nell ()
Studies in Economics from School of Economics, University of Kent
After the adoption of more market-oriented monetary policy measures in 1980, the South African Reserve Bank primarily relied on setting predetermined growth targets for M3 to achieve its primary objective of price stability. The main purpose of this paper is to test empirically whether there exists a stable long-run demand for money function over the period 1965-1997. The empirical results suggest that there exists a stable long-run demand for money function for M3 in South Africa, while the demand for M1 and M2 display parameter instability following financial reforms since 1980. The results largely support the South African Reserve Bank's view that the M3 money stock could serve as an indicator for monetary policy.
Keywords: Demand for Money; Stability; Cointegration (search for similar items in EconPapers)
JEL-codes: C22 E41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:9905
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Studies in Economics from School of Economics, University of Kent School of Economics, University of Kent, Canterbury, Kent, CT2 7FS.
Bibliographic data for series maintained by Tracey Girling ().