An Empirical Analysis of Money Demand Function in Nepal

Budha, Birendra Bahadur

doi:10.3126/nrber.v23i1.52751

Cited by 3 publications

(1 citation statement)

References 10 publications

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“…Studies on the demand for money in Nepal, for instance, are by Poudel (1989), Khatiwada (1997), Goudel (2003), Kharel and Koirala (2010) and Budha (2011). Using the OLS method, Poudel (1989) estimated the money demand function for Nepal with data from 1975 to 1987 and found the stable demand function for narrow money with income elasticity coefficient being greater than unity.…”

Section: Introductionmentioning

confidence: 99%

Demand for Money in Nepal: An ARDL Bounds Testing Approach

Budha¹

2013

NRB Econ. Rev.

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This paper investigates the demand for money in Nepal using the Autoregressive Distributed Lag (ARDL) approach for the period of 1975-2011.The results based on the bounds testing procedure reveal that there exist the cointegration among the real money aggregates (Mr1 and Mr2 ), real income, inflation and interest rate. The real income elasticity coefficient is found to be positive and the inflation coefficient is negative. The interest rate coefficient is negative for both of the real monetary aggregates supporting the theoretical explanation. In addition, the error correction models suggest that the deviations from the long-run equilibrium are short-lived in Mr1 than Mr2 . Finally, the CUSUM and CUSUMSQ tests reveal that the Mr1 money demand function is stable, but Mr2 money demand function is not stable implying that the monetary policy should pay more attention to Mr1 than Mr2 .

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Section: Introductionmentioning

confidence: 99%

Demand for Money in Nepal: An ARDL Bounds Testing Approach

Budha¹

2013

NRB Econ. Rev.

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Stability of Money Demand Function in the SAARC Region: A Panel Co-Integration Approach

Nepal

Paija

2020

Journal of Economic Integration

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This study explores the causality relationships between money demand, real income, price, and interest rate by focusing on South Asia for the period between 1986 and 2017 using panel data econometrics. Our estimations based on panel auto-regressive distributed lag (ARDL) reveal a significant and positive long-run relationship between real income and money demand, while a negative relationship exists with interest rate and price. The panel vector error correction model causality results highlight a feedback relationship between money demand and real income, but a short-run unidirectional causality between price and interest rate and real income. We also discover long-run bidirectional causality among these variables. Our results indicate that the money demand function was stable in South Asian economies during the time period considered by this study. Therefore, the central bank of these countries can use money supply as an appropriate instrument to manage monetary policy to achieve overall price and macroeconomic stability.

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تقدير دالة الطلب على النقود في اليمن <b></b>

العامري,

عبدالجبار

2018

srj

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يهدف البحث إلى محاولة التعرف على العلاقة طويلة وقصيرة الأجل بين الأرصدة النقدية الحقيقية وبين العوامل المحددة لها (الدخل الحقيقي، ومعدل التضخم، وسعر الفائدة، وسعر الصرف) في الاقتصاد اليمني باستخدام بيانات شهرية تغطي الفترة من يناير 2005 إلى نوفمبر 2014. وقد استخدم منهج الانحدار الذاتي لفجوات الإبطاء الموزعة للتكامل المشترك (Autoregressive Distributed Lag (ARDL) approach to cointegration)، والذي يعد من المناهج القياسية الحديثة المستخدمة في تقدير دالة الطلب على النقود، وتشير نتائج التقدير إلى وجود تأثير معنوي إحصائياً للعوامل المحددة للطلب الحقيقي على النقود بمعناها الواسع في الأجل الطويل في الاقتصاد اليمني. في حين يتأثر الطلب الحقيقي على النقود، في الأجل القصير، بكل من الدخل الحقيقي، وسعر الفائدة، وسعر الصرف، فقط، ومع ذلك كشفت النتائج عن انخفاض أثر كل من سعر الفائدة، وسعر الصرف في الأجل القصير عنه في الأجل الطويل. كما كشفت نتائج الدراسة من خلال اختبار الاستقرار CUSUM, CUSUMQ Test أن الطلب الحقيقي على النقود بمعناه الواسع تتسم بالاستقرار بما يسمح للسلطات النقدية الاعتماد على دالة الطلب على النقود في صياغة سياسة نقدية فاعلة.

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An Empirical Analysis of Money Demand Function in Nepal

Cited by 3 publications

References 10 publications

Demand for Money in Nepal: An ARDL Bounds Testing Approach

Demand for Money in Nepal: An ARDL Bounds Testing Approach

Stability of Money Demand Function in the SAARC Region: A Panel Co-Integration Approach

تقدير دالة الطلب على النقود في اليمن <b></b>

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