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How Useful is Monetary Econometrics in Low-Income Countries? T+L3104he Case of Money Demand and the Multipliers in Rwanda

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  • Gabriel Di Bella
  • Mr. David Hauner

Abstract

This paper revisits the usefulness of econometric monetary analysis in low-income countries in a case study on Rwanda, an interesting case given its floating exchange rate and reliance on indirect monetary policy instruments on the one hand, and its somewhat typical data and institutional shortcomings on the other hand. The findings are generally encouraging for the use of econometric models for monetary analysis in low-income countries. Notwithstanding substantial qualifications, time series and structural models of the money multiplier and money demand yield results that are statistically and economically reasonable enough to usefully inform policymaking.

Suggested Citation

  • Gabriel Di Bella & Mr. David Hauner, 2005. "How Useful is Monetary Econometrics in Low-Income Countries? T+L3104he Case of Money Demand and the Multipliers in Rwanda," IMF Working Papers 2005/178, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2005/178
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    References listed on IDEAS

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    1. Michelle R. Garfinkel & Daniel L. Thornton, 1991. "The multiplier approach to the money supply process: a precautionary note," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 47-64.
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    6. Mr. Mangal Goswami & Oya Celasun, 2002. "An Analysis of Money Demand and Inflation in the Islamic Republic of Iran," IMF Working Papers 2002/205, International Monetary Fund.
    7. Mokhlis Zaki, 1995. "Forecasting the money multiplier and the control of money supply in Egypt," Journal of Development Studies, Taylor & Francis Journals, vol. 32(1), pages 97-111.
    8. Gangadhar Darbha, 2002. "Testing for long-run stability - an application to money multiplier in India," Applied Economics Letters, Taylor & Francis Journals, vol. 9(1), pages 33-37.
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    Cited by:

    1. Marcelin Diagne, 2010. "Real Money Demand, Income, and Interest Rates in Senegal: Is there a Long-Run Stable Relation?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 213-222, May.
    2. repec:aer:wpaper:193 is not listed on IDEAS
    3. repec:kap:iaecre:v:16:y:2010:i:2:p:213-222 is not listed on IDEAS

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