IMF Staff Papers, Volume 49, No. 3

IMF Staff Papers, September 23, 2002

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IMF Staff Papers, Volume 49, No. 3

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Bibliographic details

• Published: September 23, 2002
• Series: IMF Staff Papers
• Volume: 49
• DOI: https://doi.org/10.5089/9781589061224.024

Overview

• This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98.
• Two central research questions:
  • Whether money demand stability is threatened by banking crises.
  • Whether crises lead to structural breaks in the relation between monetary indicators and prices.
• The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.

Methodology

• Cointegration analysis.
• Error correction modeling.

Key findings

• Overall, no systematic evidence that banking crises cause money demand instability is found.
• The study examines the potential for structural breaks in the relation between monetary indicators and prices but reports no systematic destabilizing effect attributable to banking crises.
• The paper includes analysis of inflation targeting within IMF-supported adjustment programs (contextual assessment).

Subject areas and keywords

• Subject: Demand for money, Foreign exchange, Income inequality, Inflation, Inflation targeting, Monetary policy, Money, National accounts, Prices, Real exchange rates
• Keywords: adjustment program, Central Asia, Demand for money, East Asia, Europe, Income inequality, Inflation, Inflation targeting, inflation targeting in the context, Middle East, price equation, Real exchange rates, SP, unemployment target, wage, wage inequality