EMPIRICAL EVIDENCE FOR A MONEY DEMAND FUNCTION: A PANEL DATA ANALYSIS OF 27 COUNTRIES IN 1988-98.

The purpose of this paper is to estimate the money demand function of Cagan (1956) using a panel data set covering 27 countries with different economic levels over the period 1988-98. The static fixed effects and the dynamic fixed effects reveal that a money demand equation exists. However, in contrast to the theory proposed by Cagan, estimates of the output elasticity of money demand are in the range from 0.18 to 0.20.

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Year of publication:	2006
Authors:	GARCIA-HIERNAUX, Alfredo ; CERNO, Leonel
Published in:	Applied Econometrics and International Development. - Euro-American Association of Economic Development. - Vol. 6.2006, 1
Publisher:	Euro-American Association of Economic Development
Subject:	Money demand \| Inflation \| Panel data \| Dynamic fixed effects

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Type of publication:	Article
Classification:	C23 - Models with Panel Data ; C52 - Model Evaluation and Testing ; E41 - Demand for Money
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005406781