Demand for Money, Structural Break and Money's Role in Monetary Policy in Ghana: An Empirical Evidence

Financial innovation and the stability of money demand in Nigeria

“…The short-run relationship between financial innovation and the measures of money demand are significantly positive as a 1% increase in the value of financial innovation transactions leads to a 26.5%, 71.90% and 61.60% increase in M1, M2 and M3, respectively. This is consistent with the findings of Hafer and Kutan (2003) in the Philippines, Adil et al (2020) in India, Hye (2009) in Pakistan, Cho and Miles (2007) in Korea, and Akosah et al, (2017), Mannah-Blankson and Belyne ( 2004) and Insah et al (2013) in Ghana. The results indicate that the impact of financial innovation is higher on broad money and in the long run than the short run and could imply that financial innovation increases the velocity money demand.…”

“…Financial innovation is considered potent in influencing the stability of money demand through the digitalization of money, emergence of virtual currency, ability of electronic fund transfers to substitute cash, and the penetration of digital payment channels. On the empirical front, some studies have identified financial innovation as a major determinant of money demand (Akosah et al, 2017;Cho & Miles, 2007;Insah et al, 2013;Mannah-Blankson & Belyne, 2004). Authors.…”

“…Most studies that investigated the effect of financial innovation on the stability of money demand rely on regime change models (Joesph et al, 2013; Folarin & Asongu, 2019). Only a few studies expanded the money demand function model to accommodate the direct and indirect measures of financial innovation (Akosah et al, 2017; Insah et al, 2013; Mannah‐Blankson & Belyne, 2004; Nchor & Adamec, 2016). Amromin and Chakravorti (2007) found that debit cards and automated teller machines (ATMs) reduced cash usage in 30 developed economies between 1998 and 2003.…”