Black-market exchange-rate expectations and the domestic demand for money

Bléjer, Mario I.

doi:10.1016/0304-3932(78)90028-4

Cited by 48 publications

(21 citation statements)

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“…These results reject the possibility of the endogeneity of y and r d in the money demand model. The ® ndings support the predictions of both McKinnon (1973) and Shaw (1973) and Blejer (1978b) as well as the currency substitution hypotheses (Equation 9). More precisely, the results reveal that an increase in returns from domestic money raises the domestic demand for money and the accumulation of monetary assets.…”

Section: E M Pir I C a L R Es U L T Ssupporting

confidence: 84%

“…Thus, UM premiums weaken the demand for domestic money (Blejer, 1978b) . Hence, there is a decline in monetary accumulation in LDCs.…”

Section: Introductionmentioning

confidence: 99%

“…This substitution between domestic and foreign monies depends on their relative rates of return. In addition, the demand for domestic (foreign) money is negatively (positively) a ected by the rate of an expected depreciation of domestic currency (Blejer, 1978b) . This expected depreciation is captured by UM premiums.…”

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confidence: 99%

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Demand for money in Bangladesh: a cointegration analysis

Siddiki¹

2000

Applied Economics

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The aim of this study is to estimate the demand for real broad (M2) money in Bangladesh using the most recently developed autoregressive distributed lag approach to cointegration analyses. The empirical results show that there is a unique cointegrated and stable long-run relationship among real per capita broad money demand, real per capita income, domestic interest rates and unofficial exchange rate (UM) premiums which act as a surrogate for foreign interest rates. With money as the dependent variable, the results show that the income and interest elasticities are positive while the UM premium elasticity is negative. These results suggest that distortions in the financial and foreign exchange markets should be reduced in order to increase financial saving or monetary accumulation. Our results also reveal that the demand for money in Bangladesh is stable despite the changes in financial and exchange rate policies between 1975 and 1995.

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Section: E M Pir I C a L R Es U L T Ssupporting

confidence: 84%

“…Thus, UM premiums weaken the demand for domestic money (Blejer, 1978b) . Hence, there is a decline in monetary accumulation in LDCs.…”

Section: Introductionmentioning

confidence: 99%

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Demand for money in Bangladesh: a cointegration analysis

Siddiki¹

2000

Applied Economics

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“…Several studies -- Doblin (1951), Latan(~ (1954Latan(~ ( , 1963, Adekunle (1968), Ezekial and Adekunle (1969), Melitz and Correa (1970), Perlman (1970), Sushka and Slovin (1976), Graves (1978), and Kenny (1991) --have included both industrial and developing countries in time-series or cross-section tests. Comparative studies specifically focusing on developing countries include Khan (1980), Driscoll and Lahiri (1983), Arrau and De Gregorio (1990), Arrau et al (1991), andMalixi (1991), all of which examine a broad cross-section of countries; Campbell (1970), on comparisons between Korea (with declining inflation) and Brazil (with rising inflation); Ntang (1990), andSimmons (1991), on African countries; Fan and Liu (1971), Fry (1978), Wong (1981, Khan (1982), Arizen and Ndubizu (1990), and Tseng and Corker (1991), on Asian countries; Moufti (1976) and Crockett and Evans (1980), on Middle Eastern countries; Darrat (1986a), on oil-exporting countries; and Blejer (1978), Cambiaso (1978), and Darrat (1986b), on Latin American countries. Cagan (1956), Khan (1975Khan ( , 1977a, and Taylor (1991) tested models of money demand under hyperinflation for European countries, and Khan (1977b) and Phylaktis and Taylor (1992) tested similar models for Latin American countries.…”

Section: Notesmentioning

confidence: 99%

International comparisons of money demand

Boughton

1992

Open Econ Rev

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Many studies of the demand for money, covering a wide variety of economies, have demonstrated the importance of financial innovations and shifts in monetary policy regimes, but they have also illustrated the difficulty of measuring and assessing such changes. Because innovations and regime shifts have differed markedly across countries, international comparisons can help identify their effects. This paper reviews the literature on money demand comparisons, focusing primarily on industrial countries. It finds that innovations have had widespread effects, but also that the demand for money is not generally less stable now than it was before those changes occurred. Copyright Kluwer Academic Publishers 1992money demand, comparative studies, monetary policy, financial innovations, cointegration, error correction models,

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“…Sheikh (1976) whereas black market rates have been used by Blejer (1978) in monetarist models of exchange rate determination and by Giddy (1978) in Box-Jenkins efficiency tests.…”

Section: Introductionmentioning

confidence: 99%

Exchange rate behavior with currency inconvertibility

Macedo

1982

Journal of International Economics

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Black-market exchange-rate expectations and the domestic demand for money

Cited by 48 publications

References 1 publication

Demand for money in Bangladesh: a cointegration analysis

Demand for money in Bangladesh: a cointegration analysis

International comparisons of money demand

Exchange rate behavior with currency inconvertibility

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