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The Demand for Money in Greece 1962 to 1998

Author

Listed:
  • Loizos, Konstantinos
  • Thompson, John
Abstract
The paper examines the demand for narrow money in Greece over the period 1962 to 1998. The data is tested to examine the order of integration. Estimation of the demand function follows the two step methodology. The first step entails the specification of the long run equilibrium relationship between real narrow money, the index for industrial production (a proxy for real income), an interest rate and the rate of inflation through the estimation of the cointegrating vector by the Johansen technique. The second step involves an Error Correction Equation being estimated to provide the short-run dynamics. Finally the model is simulated to see how well it tracks the actual values of the dependent variable.

Suggested Citation

  • Loizos, Konstantinos & Thompson, John, 2001. "The Demand for Money in Greece 1962 to 1998," MPRA Paper 54035, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54035
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    File URL: https://mpra.ub.uni-muenchen.de/54035/1/MPRA_paper_54035.pdf
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    References listed on IDEAS

    as
    1. Brissimis, Sophocles N & Leventakis, John A, 1985. "Specification Tests of the Money Demand Function in an Open Economy," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 482-489, August.
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    5. Sunil Sharma & Neil R. Ericsson, 1998. "Broad money demand and financial liberalization in Greece," Empirical Economics, Springer, vol. 23(3), pages 417-436.
    6. Daniel Himarios, 1986. "Administered interest rates and the demand for money in Greece under rational expectations," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 122(1), pages 173-188, March.
    7. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    8. Psaradakis, Zacharias, 1993. "The Demand for Money in Greece: An Exercise in Econometric Modelling with Cointegrated Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(2), pages 215-236, May.
    9. Durbin, J, 1970. "Testing for Serial Correlation in Least-Squares Regression When Some of the Regressors are Lagged Dependent Variables," Econometrica, Econometric Society, vol. 38(3), pages 410-421, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Demand for Money; Error Correction Modeling;

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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