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Demand for Money in the Selected OECD Countries: A Time Series Panel Data Approach and Structural Breaks

  • Economics


Time series panel data estimation methods are used to estimate cointegrating equations for the demand for money (M1) for a panel of 11 OECD countries. The effects of financial reforms are analysed with structural break tests and estimates for alternative sub-samples. Our results in the post-reforms sub-samples show that the income elasticity of the demand for money has decreased and response to interest rate changes has increased.

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