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Money Demand and Inflation in Madagascar

This paper uses a two-sector model to estimate the relationship between prices, money, and the exchange rate in Madagascar during the period 1982-2004. The estimated model, using quarterly data, finds a stable long-run relationship among monetary aggregates, domestic prices, real income, and foreign...

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Bibliographic Details
Main Author: Ben Nassar, Koffie
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2005
Series:IMF Working Papers
Subjects:
Price Level
Exchange Rates
Monetary Economics
Prices
Inflation
Currency
Macroeconomics
Monetary Base
Money And Monetary Policy
Money Supply
Foreign Exchange
Monetary Policy, Central Banking, And The Supply Of Money And Credit: General
Deflation
Money
Demand For Money
Exchange Rate Arrangements
Madagascar, Republic Of
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper uses a two-sector model to estimate the relationship between prices, money, and the exchange rate in Madagascar during the period 1982-2004. The estimated model, using quarterly data, finds a stable long-run relationship among monetary aggregates, domestic prices, real income, and foreign interest rates. In addition, the error-correction model shows that changes in the monetary aggregates, the exchange rate, and foreign interest rates exert a significant impact on inflation. The results also suggest that a disequilibrium in the money market has a lasting impact on inflation. The paper concludes with policy recommendations
Physical Description:25 pages
ISBN:9781451862553

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