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Title: |
Testing Alternative Specifications of Reserve
Flow Equations: The Japanese Experience, 1959-1986 |
| Author: |
Lee, Bun Song;
Wohar, Mark E. |
| Author
Affiliation: |
U NE, Omaha |
| Source: |
International Economic Journal, Spring 1991, v. 5, no. 1, pp. 35-50 |
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Publication Date: |
Spring 1991 |
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Abstract: |
Using annual data for Japan spanning the
period 1959-86, alternative reduced form equations are derived and
various monetarist propositions are tested against their Keynesian
alternatives. Employing specification and exogeneity tests in order to
choose between restricted and unrestricted model
specifications--concerning purchasing power parity and exchange market
pressure--we find evidence of deviation from purchasing power parity.
The results also indicate that the monetary approach is favored over the
Keynesian alternative. Finally, the results suggest that foreign
disturbances are transmitted to the exchange market pressure variable by
foreign money supply growth, controlling for real foreign income growth,
rather than through foreign inflation. |
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