Financial Deregulation and the Dynamics of Money, Prices, and Output in New Zealand and Australia

Orden, David; Fisher, Lance A.

doi:10.2307/2077842

Cited by 52 publications

(26 citation statements)

References 11 publications

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“…There are also two important studies by Orden and Fisher (1993) and Siklos (1997) that highlight the significant role and impact of financial innovations in the context of NZ. More specifically, Orden and Fisher (1993) investigate the dynamic impacts of financial deregulation in the 1980s on money, prices and output for NZ and Australia employing a VAR methodology.…”

Section: Introductionmentioning

confidence: 99%

“…More specifically, Orden and Fisher (1993) investigate the dynamic impacts of financial deregulation in the 1980s on money, prices and output for NZ and Australia employing a VAR methodology. They use a standard Choleski-type of contemporaneous identifying restrictions imposed on the error correction model to obtain various impulse functions.…”

Section: Introductionmentioning

confidence: 99%

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Long‐ and short‐run determinants of the demand for money in New Zealand: A cointegration analysis

Valadkhani

2002

New Zealand Economic Papers

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The existence of a stable demand for money is very important for the conduct of monetary policy even in this new era of inflation targeting. It is argued that previous work on the demand for money in New Zealand has been either not very satisfactory in a number of ways or outdated. This paper examines the long-run determinants of the demand for M3 employing the Johansen cointegration technique and quarterly data for the period 1988:1-2002:2. This paper finds, inter alia, that the demand for money is cointegrated with real income, the spread between interest on money and on non-money assets, the expected rate of inflation, and the real effective (trade weighted index) exchange rate. JEL classification numbers: E41, E52, and C32.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Long‐ and short‐run determinants of the demand for money in New Zealand: A cointegration analysis

Valadkhani

2002

New Zealand Economic Papers

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“…Orden and Fisher (1993) found some instability of money demand in Australia; however their results for New Zealand are different as they found stability over the whole and sub-periods. Siklos (1995aSiklos ( , 1995b examined the cointegrating links between M3, expected inflation and short term interest rates (the difference between NZ and US rates) over the 1981-1994 period and attained implausibly high income elasticities varying between 2 to 6.…”

Section: The Case Of New Zealandmentioning

confidence: 76%

“…Orden and Fisher (1993) examined the dynamic impacts of financial deregulation on M3 demand over the 1965-1989 period and found a cointegrating relationship between real M3 and prices and output series prior to the financial liberalization; however they did not support cointegration between M3 demand and its price and output determinants either over the full sample or after financial liberalization, and this implies instability in the M3 demand function over the entire period and especially subsequent to 1982.…”

Section: The Case Of Australiamentioning

confidence: 99%

Australasian money demand stability: application of structural break tests

Kumar

Webber

2013

Applied Economics

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“…Although financial innovation has w F A been considered as a factor of money demand in various ways, for example in Friedman and Schwartz (1982), Orden and Fisher (1994), Ireland (1995), Collins and Anderson (1998), and Mulligan and Sala-i-Martin (2000), the inclusion of is a novel aspect of equation (20). A decrease in increases the productivity of credit services and so decreases the demand for real money balances.…”

Section: T X T T M T a L T H T P T C T T Q T M T P T K T T R T P T K mentioning

confidence: 99%

Money Demand in a Banking Time Economy

Gillman

Otto²

2004

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Money Demand in a Banking Time Economy ABSTRACTThe paper presents a theory of the demand for money that combines a special case of the shopping time exchange economy with the cash-in-advance framework. The model predicts that both higher inflation and financial innovation -that reduces the cost of credit -induce agents to substitute away from money towards exchange credit. This results in an interest elasticity of money that rises with the inflation rate rather than the constant elasticity found in standard shopping time specifications. A number of the key predictions of the banking time theory are tested using quarterly data for the US and Australia. We find cointegration empirical support for the model, with robustness checks and a comparison to a standard specification. JEL-Classification: O42, E13, E41, E51

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Financial Deregulation and the Dynamics of Money, Prices, and Output in New Zealand and Australia

Cited by 52 publications

References 11 publications

Long‐ and short‐run determinants of the demand for money in New Zealand: A cointegration analysis

Long‐ and short‐run determinants of the demand for money in New Zealand: A cointegration analysis

Australasian money demand stability: application of structural break tests

Money Demand in a Banking Time Economy

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