Analyzing the Money Demand Function in Iran

Dehmardeh, Nazar; Izadi, Hamid Reza

Document Type : Research Paper

Authors

Abstract

Demand for money is an important part of macroeconomic models and the monetary policy; furthermore, demand for money and its stability are important in an economy especially in the design of monetary policy. We estimate the Iran’s demand for money for period (1971-2008) using the autoregressive distributed lag (ARDL) method. We also use the error correction model for short-run dynamic analysis and stability test in model. The explanatory variables include gross domestic product, inflation rate, and foreign exchange rate, short-run and long-run interest. The results show that there is a long-run equilibrium relationship between the variables. According to our finding , the gross domestic product have positive impact on the demand for money and exchange rate and inflation rate have significant negative effects on the demand for money in Iran.

References

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Economics Research

Analyzing the Money Demand Function in Iran

References

References

Volume 9, Issue 33 - Serial Number 2
July 2009
Pages 153-169

Analyzing the Money Demand Function in Iran

References

References

Volume 9, Issue 33 - Serial Number 2July 2009Pages 153-169

Volume 9, Issue 33 - Serial Number 2
July 2009
Pages 153-169