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Money Demand Causality for Ten Asian Countries: Evidence from Linear and Nonlinear Causality Tests

Risk Management Post Financial Crisis: A Period of Monetary Easing

ISBN: 978-1-78441-027-8, eISBN: 978-1-78441-026-1

Publication date: 1 October 2014

Abstract

This chapter estimates causality properties between real money demand and a number of determinants, that is, real output, the lending rate and the real exchange rate, across 10 Asian economies through linear and nonlinear causality methodologies spanning the period 1990–2012. The results document both bidirectional and unidirectional causality between monetary aggregates (M1 and M2) and their determinants for different country groups. The empirical findings exemplify the role of the demand for money as a policy tool and can provide useful policy recommendations to the Asian monetary authorities in their vision of forming a future monetary union.

Keywords

Citation

Ajmi, A.N. and Apergis, N. (2014), "Money Demand Causality for Ten Asian Countries: Evidence from Linear and Nonlinear Causality Tests", Risk Management Post Financial Crisis: A Period of Monetary Easing (Contemporary Studies in Economic and Financial Analysis, Vol. 96), Emerald Group Publishing Limited, Leeds, pp. 193-210. https://doi.org/10.1108/S1569-375920140000096007

Publisher

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Emerald Group Publishing Limited

Copyright © 2014 Emerald Group Publishing Limited