Estimating Money Demand for Ghana

Abstract

The study suggested that money demand function for Ghana using M1 and M2 remained relatively unstable between 1991 and 2011 as evidenced by trends in recursive residual and the cumulative sums of squared residuals derived from the estimated models. However, real money demand function for broad money (M2+) was found to be stable relative to real money   demand functions estimated using for M1 and M2 as dependent variables. The study therefore concluded that real money demand function for M1 and M2 are remained relatively unstable in Ghana compared with real money demand function for broad money which exhibits some degree of stability.

Keywords: Demand, Money, Recursive, Unit Root

Article Review Status: Published

Pages: 28-43 (Download PDF)

Creative Commons Licence
This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License