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Title: |
Does Inflation Variability Affect the Demand for Money in China?
Evidence from Error-Correction Models |
| Author: |
Arize, A. C.;
Malindretos, John |
| Author
Affiliation: |
TX A&M U; Global Management & Financial
Consulting Inc |
| Source: |
International Economic Journal, Spring 2000, v. 14, no. 1, pp. 47-60 |
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Publication Date: |
Spring 2000 |
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Abstract: |
Theory suggests that inflation variability
should affect real money balances, although there is ambiguity about the
sign of the effect. Using cointegration and vector-error correction (VEC)
modelling techniques, this paper presents new evidence on the effect of
inflation variability on the demand for real money balances in China.
The major result shows that increases in the inflation variability exert
a significant effect upon money demand in both the short-run and the
long-run. |
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