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Evidence on the demand for money function in Uganda

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  • Policy Analyst - UNICEF Zimbabwe

Abstract

The paper provides an empirical analysis of the demand for money function in Uganda. It argues that monetary policy: based on monetarist views of the dynamics of a less developed economy is, to say the least, ineffective in regulating the economy. An error correction model is used to examine the character of the demand for money – in particular if it is stable in order for traditional monetary policy to be effective. The evidence on Uganda suggests that the demand for money function is unstable and hence, monetary policy needs to be used in conjunction with other policies to achieve the goal of economic stabilisation and adjustment.

Suggested Citation

  • Policy Analyst - UNICEF Zimbabwe, 2002. "Evidence on the demand for money function in Uganda," Development and Comp Systems 0210005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:0210005
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    References listed on IDEAS

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    4. Paul Davidson, 1978. "Money and the Real World," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-15865-2, October.
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    6. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
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    9. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    10. Arestis, Philip & McCauley, Kevin & Sawyer, Malcolm, 2001. "An Alternative Stability Pact for the European Union," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(1), pages 113-130, January.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. John Paul Dunne & Elizabeth Kasekende, 2018. "Financial Innovation and Money Demand: Evidence from Sub‐Saharan Africa," South African Journal of Economics, Economic Society of South Africa, vol. 86(4), pages 428-448, December.
    2. Mr. Andrew Berg & Ms. Filiz D Unsal & Mr. Rafael A Portillo, 2010. "On the Optimal Adherence to Money Targets in a New-Keynesian Framework: An Application to Low-Income Countries," IMF Working Papers 2010/134, International Monetary Fund.
    3. Nabiddo, Winnie, 2007. "The analysis of money demand for Uganda (1986:1-2003:4)," Occasional Papers 54936, Economic Policy Research Centre (EPRC).
    4. Agya Atabani Adi & Joshua Sunday Riti, 2017. "Determination of Long and Short Run Demand for Money in the West African Monetary Zone (WAMZ) Countries: A Panel Analysis," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 2(2), pages 79-97, December.
    5. John Bosco Nnyanzi, 2018. "The Interaction Effect of Financial Innovation and the Transmission Channels on Money Demand in Uganda," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(12), pages 1-1, December.

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    More about this item

    Keywords

    Error correction mechanism; demand for money; monetary policy; development policy in Uganda;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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