The Gambia: Demand for Broad Money and Implications for Monetary Policy Conduct
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Summary:
This paper evaluates the demand for broad money (M2) in The Gambia for January 1988-June 2007. There appears to be a long-run relationship for demand for real M2, but the relationship is not stable. Exogenous output shocks, financial innovation, changes in income velocity, and inadequate data quality contribute to the instability. The authorities may need to apply the monetary targeting regime flexibly in the overall objective of preserving price stability. A possible option for The Gambia is to become an inflation targeter lite.
Series:
Working Paper No. 2009/192
Subject:
Commercial banks Demand for money Financial institutions Inflation Monetary base Money Prices Treasury bills and bonds
English
Publication Date:
September 1, 2009
ISBN/ISSN:
9781451873399/1018-5941
Stock No:
WPIEA2009192
Pages:
41
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