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Title: |
Further Results on the Long-Run Demand for
Money in Korea: A Cointegration Analysis |
| Author: |
Lee, Tong Hun;
Chung, Keun Jon |
| Author
Affiliation: |
U WI,
Milwaukee; Keimyung U |
| Source: |
International Economic Journal, Autumn 1995, v. 9, no. 3, pp. 103-113 |
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Publication Date: |
Autumn 1995 |
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Abstract: |
Contrary to previous results by others,
this paper provides the empirical evidence that M2 but not M1, monetary
aggregate in Korea is meaningfully cointegrated with income, interest
rate, and exchange rate, thus showing the existence of long-run demand
function for a broad definition of money. Although such a finding
supports the current practice of the Korean monetary authority in
controlling M2, a question still remains as to how broadly the monetary
components should be aggregated for the purpose of monetary control. |
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