kia_02

Emory University
Department of Economics
Working Papers

Title: Demand for Money, Economic Policies and Stability

Number: 02-11

Author: Amir Kia

Issue Date: November 2002

Abstract: This study identifies Canadian fiscal and monetary policy regime changes that could influence the services of money. It is argued that if these policy regime changes are not incorporated in the estimation of demand for real balances the result would be biased and unstable. Using Canadian monthly data for the 1975:Jan-2001:June period, the paper estimates two demand-for-money (M1) functions. It was found the demand for money in Canada is stable over the short- and long run periods when these policy regime changes are incorporated and the estimated coefficients have correct signs.

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Title:	Demand for Money, Economic Policies and Stability
Number:	02-11
Author:	Amir Kia
Issue Date:	November 2002
Abstract:	This study identifies Canadian fiscal and monetary policy regime changes that could influence the services of money. It is argued that if these policy regime changes are not incorporated in the estimation of demand for real balances the result would be biased and unstable. Using Canadian monthly data for the 1975:Jan-2001:June period, the paper estimates two demand-for-money (M1) functions. It was found the demand for money in Canada is stable over the short- and long run periods when these policy regime changes are incorporated and the estimated coefficients have correct signs.