The ARDL bounds testing procedure advanced by Pesaran, et al. (2001) is used to estimate a quarterly model of the long-run money demand for postrevolution Iran, and test for its stability. Using quarterly data from 1980:2 to 2003:1, we find support for the existence of stable money demand...

We investigate long-run relations and short-run dynamics between China’s bilateral trade balance and real exchange rates with thirteen major trading partners over 1981-2008. Maximum likelihood tests of cointegration reveal no evidence of significant long-run relationship between the two...

Previous literature suggests that economic exposure shouid be managed within the firm’s overall strategy regarding the choice of production iocation. In this paper, it is shown that this strategy is equivalent to exposed firms incorporating real options in their cost function, enabling these...

This study analyzes equity risk premium, that is the incremental return over and above the return on risk free securities for assuming the risk. Using GARCH estimate reveals strong positive correlation between growth rate of GDP and that of the equity risk premium. An increase in future economic...

The portfolio model of asset allocations is used to estimate the demand function for real M2 in the United States. The explanatory variables include real return on real M2, real returns on stocks and bonds, wealth, and the expected inflation rate. The cointegration test shows that the demand for...

This study investigates the determinants of the money demand function in Saudi Arabia. The Saudi economy was instable during the period 1977-1997 because of its dependence on the production of oil. This dependence affects sharply the rates of growth and the rates of inflation. The integration...

Inflation and the level of total factor, capital and labor productivity are integrated of the same order and are cointegrated in each of the G7 countries. The long-run relationship is mainly negative, the magnitude generally small, and there is no strong pattern of Granger causality between...

Using a developing economy framework and within the empirical context of the SVAR (Structural Vector Autoregression) methodology, the paper examines the interaction between money, output and interest rates and sheds light on some fundamental propositions of the business cycle. The empirical...

This paper examines the long run relationship between the monetary base and other monetary aggregates with the permanent income and inflation rates predicated on the assumption that the velocity turn over of money is stable over time. Both the cusum square test and unit root test tend to confirm...

The recent fluctuations in stock prices around the world and the critical place that the demand function for money holds in the formulation of a country’s monetary policy motivated us to investigate the question as to whether real stock prices play any significant role in affecting the demand...