Money demand in the Dominican Republic

Carruth, Alan and Sanchez-Fung, Jose R. (2000) Money demand in the Dominican Republic. Applied Economics, 32 (11). pp. 1439-1449. ISSN 0003-6846. (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

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This paper investigates a demand for money relationship for the Dominican Republic. The financial system of the Dominican Republic is underdeveloped, and there are no suitable domestic data on the opportunity cost of holding money. Economic links with the USA suggest a possible role for a foreign interest rate effect and a currency substitution effect in the demand for domestic money. A long-run demand for money relationship is developed from the perspective of alternative estimation methodologies, and it is shown that a 'literature standard' specification augmented by foreign monetary variables is robust. The ensuing short-run dynamic model is adequate, stable and suggests an important role for expected inflation, and a real bilateral exchange rate with the USA. A number of policy implications for the Dominican Republic are drawn from the results.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: P. Ogbuji
Date Deposited: 06 Apr 2009 08:56
Last Modified: 17 Jul 2014 11:40
Resource URI: (The current URI for this page, for reference purposes)
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