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Financial reforms and money demand: Evidence from 20 developing countries

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  • Kumar, Saten

Abstract

The effects of financial reforms on money demand (M1) are analysed with estimates for two sets of sub-samples and two break dates for twenty developing Asian and African countries. In all cases, the magnitude of income elasticity does not change significantly when compared with sub-samples and whole sample periods. Using CUSUM and CUSUMSQ tests, we find that the demand for money functions in our selected countries are temporally stable and therefore the respective monetary authorities may target money supply as the conduct of monetary policy.

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  • Kumar, Saten, 2011. "Financial reforms and money demand: Evidence from 20 developing countries," Economic Systems, Elsevier, vol. 35(3), pages 323-334, September.
    • Handle: RePEc:eee:ecosys:v:35:y:2011:i:3:p:323-334
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    2. Carrera, Cesar, 2012. "Long-Run Money Demand in Latin-American countries: A Nonestationary Panel Data Approach," Working Papers 2012-016, Banco Central de Reserva del Perú.
    3. Ben-Salha, Ousama & Jaidi, Zied, 2014. "Some new evidence on the determinants of money demand in developing countries – A case study of Tunisia," The Journal of Economic Asymmetries, Elsevier, vol. 11(C), pages 30-45.

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