Demand for Money in Mozambique: Was There a Structural Break?
IMF Working Papers, November 1, 1998
Source details
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- Demand for Money in Mozambique: Was There a Structural Break?
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Bibliographic details
- Authors: Marco A. Piñón-Farah
- Published: November 1, 1998
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451857467.001
Research focus and objectives
- Provides estimates of an error-correction model of the demand for narrow money (M1) and broad money (M2) in Mozambique.
- Assesses whether the rapid growth in money balances during 1996–97 represents a structural break or can be associated with:
- the rapidly expanding economic activity, and
- lower opportunity costs of holding money.
Key findings
- The paper obtains statistically significant coefficients for both financial and real explanatory variables.
- Successfully includes the yield of foreign instruments (expressed in local currency) as one of the key explanatory variables.
- Contrasts with several studies of economies at a similar level of development as Mozambique by finding these statistically significant relationships.
Methodology highlights
- Uses an error-correction model framework to estimate money demand for M1 and M2.
- Addresses cointegration and the dynamics linking monetary aggregates to explanatory variables (financial and real).
Subject coverage and keywords
- Subjects: Consumer price indexes, Demand for money, Economic and financial statistics, Exchange rates, Foreign exchange, Inflation, Money, Prices
- Keywords: baseline equation, broad money, cointegration, Consumer price indexes, Demand for money, equation, error correction, estimation result, exchange rate, Exchange rates, Inflation, inflation rate, Money, money demand, money demand equation, WP, yield
Document identification (selected)
- Pages: 21
- Volume: 1998
- Issue: 157
- Series: Working Paper No. 1998/157
- DOI: https://doi.org/10.5089/9781451857467.001
- Stock No: WPIEA1571998
- ISBN: 9781451857467
- ISSN: 1018-5941
IMF Working Paper — Marco A. Piñón-Farah, November 1, 1998
Content in this bundle
- Demand for Money in Mozambique: Was there a Structural Break? - WP/98/157