Old wine in a new bottle: money demand causality for 10 Asian countries. Issue 3 (20th July 2015)

• Record Type: Journal Article
• Authors: Ajmi, Ahdi Noomen; Apergis, Nicholas; Montasser, Ghassen El
• Is Part Of: International journal of emerging markets. Volume 10:Issue 3(2015)
• Page Start: 491
• Page End: 503
• Publication Date: 2015-07-20
• Subjects: Business enterprises -- Finance -- Periodicals; Investments -- Developing countries -- Periodicals; Commerce -- Periodicals; Developing countries -- Economic conditions -- Periodicals; 330.91724
• DOI: 10.1108/IJoEM-09-2013-0138
• Languages: English
• ISSNs: 1746-8809

Abstract

<abstract> <title> <x content-type="archive" xml:space="preserve">Abstract</x> </title> <sec> <title content-type="abstract-heading">Purpose</title> <p> – The purpose of this paper is to estimate causality properties between real money demand and a number of determinants, i.e., real output, the lending rate and the real exchange rate, across ten Asian economies. </p> </sec> <sec> <title content-type="abstract-heading">Design/methodology/approach</title> <p> – The study makes use of the causality methodology of Emirmahmutoglu and Kose (2011) over the period 1990-2012. </p> </sec> <sec> <title content-type="abstract-heading">Findings</title> <p> – The results document both bidirectional and unidirectional causality between monetary aggregates (<italic>M</italic>1 and <italic>M</italic>2) and their determinants for different country groups. </p> </sec> <sec> <title content-type="abstract-heading">Research limitations/implications</title> <p> – The empirical findings exemplify the role of the demand for money as a policy tool and can provide useful policy guidelines to the Asian central banks in their quest for price stability. </p> </sec> <sec> <title content-type="abstract-heading">Originality/value</title> <p> – This paper for the first time estimates causality properties between real money demand and a number of determinants, across ten Asian economies that have not used before in the literature. In addition, it employs the innovative methodology of Emirmahmutoglu and Kose (2011). The advantages of this approach are: it overcomes the problem of pre-testing needs to determine the order of integration, the lag orders on the autoregressive coefficients as well as the exogenous variable coefficients are mixed for all the cross-section units of the sample, and it is based on the approach of Meta-analysis which is capable of obtaining common results, combining those provided by a number of independent studies which test the same hypothesis.</p> </sec> </abstract>