The disaggregated money demand in the long run

Article Abstract:

A study examined money demand equilibrium by investigating the individual cointegration of money components, such as borrowed reserves, non-borrowed reserves, float, currency, checking and time deposits. Johansen's (1988) maximum likelihood method (MLE) and Park's (1992) canonical cointegrating regression technique (CCR) were used to test for cointegration of these money components. The study showed that M2 monetary aggregates (mostly time deposits) have a long-run equilibrium money demand function than M1 (mostly checking accounts). Results also show that the time deposit element consistently demonstrates elements of cointegration.

Research and Development in the Physical, Engineering, and Life Sciences, Economics, Research and Development in the Social Sciences and Humanities, Statistics, Usage, Money demand, Maximum likelihood estimates (Statistics), Statistics (Mathematics), Demand functions (Economics), Demand functions, Maximum likelihood (Statistics)

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Trade credit in a monetary economy

Article Abstract:

There have been numerous studies on the role of alternative means of payment such as bank drafts, bank credit, trade credit and trade debt. Many of these studies implied the existence of equilibrium conditions in monetary economies with additional means of payment. However, a model of these equilibrium conditions has not been presented. The role of financial and technological stochastic trends in a stochastic, dynamic, general equilibrium monetary economy with multiple means of payment is investigated.

Monetary policy, Credit, Equilibrium (Economics)

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Exogeneity and forward rate unbiasedness

Article Abstract:

The results of a study support the hypothesis of unbiased long-run forward exchange rates. Support for a unit cointegrating vector implied by the forward rate unbiased condition hypothesis in a vector error correction model also exists. Evidence also indicates a complete adjustment of forward rates to any short-run disequilibria between forward rates and spot rates. However, no significant adjustment is seen in the case of spot rates.

Prices and rates, Foreign exchange, Foreign exchange rates, Foreign exchange market

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