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Title: |
The Demand for Money in Canada: A
Cointegration Analysis |
| Author: |
Bose, Shekar;
Rahman, Hafizur |
| Author
Affiliation: |
Australian
Maritime College; U College Cariboo |
| Source: |
International Economic Journal, Winter 1996, v. 10, no. 4, pp. 29-45 |
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Publication Date: |
Winter 1996 |
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Abstract: |
In this paper, using the techniques in
cointegration theory, we find strong support for the existence of a
long-run equilibrium relationship among money demand variables in
Canada. Additionally, when the conventional partial adjustment model
(PAM) is compared to the two-stage error correction model (ECM), the
latter approach is found to perform better, with M2[plus] showing better
results than M2. Our results are also found to be in line with other
studies from the U.K. and the U.S. These findings provide rationale for
further in-depth studies on broader monetary aggregates to formulate
sound monetary policy in Canada. |
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