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Bivariate and Multivariate Tests of Money-Price Causality: Robust Evidence from a Small Developing Country

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  • Abul M. M. Masih

    (University of New South Wales, Canberra, Australia)

  • Rumi Masih

    (University of Cambridge, Cambridge, CB3 9DD, UK)

Abstract

This paper is an attempt at re-examining the question of causality between money and prices both in the bivariate and multivariate context of a small developing economy, based on an improved methodology. Pakistan is used as a case study. The study tends to suggest rather strongly that in the case of Pakistan during the period under consideration (1970|71 to 1993|94), contrary to earlier findings, it was price that was the leading variable as the structuralist maintain and not the other way around as the monetarist maintain. © 1997 John Wiley & Sons, Ltd.

Suggested Citation

  • Abul M. M. Masih & Rumi Masih, 1997. "Bivariate and Multivariate Tests of Money-Price Causality: Robust Evidence from a Small Developing Country," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(6), pages 803-825.
    • Handle: RePEc:wly:jintdv:v:9:y:1997:i:6:p:803-825
    DOI: 10.1002/(SICI)1099-1328(199709)9:6<803::AID-JID407>3.0.CO;2-H
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    References listed on IDEAS

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    Cited by:

    1. Masih, Rumi & Masih, Abul M. M., 1996. "Stock-Watson dynamic OLS (DOLS) and error-correction modelling approaches to estimating long- and short-run elasticities in a demand function: new evidence and methodological implications from an appl," Energy Economics, Elsevier, vol. 18(4), pages 315-334, October.
    2. Masih, Rumi & Masih, Abul M. M., 1996. "Macroeconomic activity dynamics and Granger causality: New evidence from a small developing economy based on a vector error-correction modelling analysis," Economic Modelling, Elsevier, vol. 13(3), pages 407-426, July.

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