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Modelling money demand in the Dominican Republic

Author

Listed:
  • Sanchez-Fung, Jose R.

    (NUBS University of Nottingham, Ningbo, China)

Abstract
The paper models money demand in the Dominican Republic using a novel, automatic general-to-specific, econometric technology - PcGets. The study finds economically sensible long run relations for real M1 and M2. Likewise, meaningful short run money demand functions are estimated. Remarkably, the corresponding rolling equilibrium correction adjustment coefficients imply a highly fine-tuned monetary policy stance in the late 1990s. This feature, however, fades after that period, probably due to time consistency problems (e.g. fiscal dominance).

Suggested Citation

  • Sanchez-Fung, Jose R., 2004. "Modelling money demand in the Dominican Republic," Economics Discussion Papers 2004-1, School of Economics, Kingston University London.
    • Handle: RePEc:ris:kngedp:2004_001
    as

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    File URL: http://eprints.kingston.ac.uk/6651/1/Sanchez-Fung-J-6651.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    money demand; monetary policy; financial dollarization; automatic model selection; general-to-specific (GETS); Dominican Republic.;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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