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Article
Long- and short-run determinants of the demand for money in the Asian-Pacific countries: an empirical panel investigation
Faculty of Commerce - Papers (Archive)
  • Abbas Valadkhani, University of Wollongong
RIS ID
23068
Publication Date
3-5-2008
Publication Details

This article was originally published as Valadkhani, A, Long- and short-run determinants of the demand for money in the Asian-Pacific countries: an empirical panel investigation, Annals of Economics and Finance, 9(1), 2008, 47-60.

Abstract

This paper examines the long- and short-run determinants of the demand for money in six countries in the Asian-Pacific region using panel data (1975-2002). Various country-specific coefficients are allowed to capture inter-country heterogeneities. Consistent with theoretical postulates, it is found that (a) the demand for money in the long-run positively responds to real income and inversely to the interest rate spread, inflation, the real effective exchange rate, and the US real interest rate; (b) the long-run income elasticity is greater than unity; and (c) both the currency substitution and capital mobility hypotheses hold only in the long run.

Link to publisher version (URL)
Annals of Economics and Finance
Citation Information
Abbas Valadkhani. "Long- and short-run determinants of the demand for money in the Asian-Pacific countries: an empirical panel investigation" (2008)
Available at: http://works.bepress.com/abbas/22/