We develop an econometric model of the demand for M2 in Tanzania, using quarterly data from 1998 to the present. The continuous decline in velocity since the late 1990s is associated with a transformation of economic activity that has cumulatively increased the monetary intensity of GDP....

This paper was commissioned by the Economic Affairs sub-committee of the East African Community Monetary Affairs Committee. The paper offers a template for Partner State central banks to employ in developing common operational and analytical approaches to understanding the evolution and...