TY  - JOUR
AB  - Purpose– Studies that have addressed the stability of the demand for money in African countries are rare. A few papers have addressed the issue in a small number of individual countries. For cross‐country comparison, this paper aims to investigate the stability of the M2 demand for money in 21 African countries using quarterly data over the period 1971Q1‐2004Q3.Design/methodology/approach– A standard money demand function is designed. It is estimated using a bounds testing approach to co‐integration and error‐correction modeling.Findings– Application of the CUSUM and CUSUMSQ tests to the residuals of error‐correction models reveals that in almost all 21 countries, M2 demand for money is stable. This could be due to incorporating the short‐run adjustment process in testing for the stability of the long‐run elasticity estimates.Research limitations/implications– Due to data limitations, the study could not be extended to all countries in Africa.Originality/value– This is the most comprehensive study in the literature for Africa.
VL  - 36
IS  - 3
SN  - 0144-3585
DO  - 10.1108/01443580910983825
UR  - https://doi.org/10.1108/01443580910983825
AU  - Bahmani‐Oskooee Mohsen
AU  - Gelan Abera
PY  - 2009
Y1  - 2009/01/01
TI  - How stable is the demand for money in African countries?
T2  - Journal of Economic Studies
PB  - Emerald Group Publishing Limited
SP  - 216
EP  - 235
Y2  - 2024/04/25
ER  -