Money demand stability: A case study of Nigeria

Saten Kumar, Don Webber and Scott Fargher
Additional contact information
Saten Kumar: Department of Business Economics, Auckland University of Technology
Scott Fargher: Department of Business Economics, Auckland University of Technology

No 1015, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

Abstract: This paper presents an empirical investigation into the level and stability of money demand (M1) in Nigeria between 1960 and 2008. In addition to estimating the canonical specification, alternative specifications are presented that include additional variables to proxy for the cost of holding money. Results suggest that the canonical specification is well-determined, the money demand relationship went through a regime shift in 1986 which slightly improved the scale economies of money demand, and money demand is stable. These findings imply that Nigeria could effectively use the supply of money as an instrument of monetary policy.

Keywords: Money demand; Structural breaks; Cointegration; Monetary policy (search for similar items in EconPapers)
JEL-codes: C22 E41 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2010-10
New Economics Papers: this item is included in nep-afr, nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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http://carecon.org.uk/DPs/1015.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Money demand stability: A case study of Nigeria (2013)
Working Paper: Money demand stability: A case study of Nigeria (2011)
Working Paper: Money demand stability: A case study of Nigeria (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:1015

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