Money Demand in Guyana
June 1, 2000
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Summary
This paper analyzes broad money demand (M2) in Guyana from January 1990 to September 1999; a period marked by deep transformations aimed at shifting Guyana from a centralized to a market economy. The paper develops a stable error-correction model based on a long-run cointegrating vector of money demand. The latter establishes that real money demand is determined in the long run by real income, interest rates, and the exchange rate. The results also show the existence of strong exchange rate-induced inflation anticipations that are typical to Guyana.
Subject: Demand for money, Exchange rates, Financial institutions, Foreign exchange, Inflation, Money, National accounts, Personal income, Prices, Treasury bills and bonds
Keywords: cointegration, Demand for money, error-correction model, exchange rate depreciation, Exchange rates, Guyana, Inflation, monetary policy, money demand, money demand equation, money demand model, money demand relation, money demand theory, open economy, Personal income, Treasury bills and bonds, treasury bills auction, WP
Pages:
38
Volume:
2000
DOI:
Issue:
119
Series:
Working Paper No. 2000/119
Stock No:
WPIEA1192000
ISBN:
9781451854169
ISSN:
1018-5941
