Empirical Analysis of Demand for Real Money Balances in Africa: Panel Evidence from Nigeria and Ghana.

This study investigates demand for real money balances in Africa using panel time-series data from Nigeria and Ghana between 1970 and 2014. The study employs Levin, Lin, Chu common unit root process and Pedroni Residual Cointegration Test which the results reveal that all the variables in the model...

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Publicado en:African & Asian Studies Vol. 19; no. 4; pp. 363 - 377
Autor principal: Nkalu, Chigozie Nelson
Formato: Artículo
Publicado: Brill Academic Publishers 2020
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Empirical Analysis of Demand for Real Money Balances in Africa: Panel Evidence from Nigeria and Ghana.
      aug:
        au: Nkalu, Chigozie Nelson
        affil:
          Lecturer, Department of Economics, University of Nigeria, Nsukka Enugu State, Nigeria
          PhD Candidate, Department of Economics, Aberdeen Business School, University of Aberdeen, Scotland, UK
      su:
        Cointegration
        Regression (Civilization)
        Least squares
        Monetary policy
        Inflation forecasting
      sug:
        subj:
          Cointegration
          Regression (Civilization)
          Least squares
          Monetary policy
          Inflation forecasting
      keyword:
        Africa
        Ghana
        inflation
        interest rates
        JEL: E12, E41, E51, E60
        Nigeria
        Panel EGLS
        real income
        Real Money Balances
        Africa
        Ghana
        inflation
        interest rates
        JEL: E12, E41, E51, E60
        Nigeria
        Panel EGLS
        real income
        Real Money Balances
      ab: This study investigates demand for real money balances in Africa using panel time-series data from Nigeria and Ghana between 1970 and 2014. The study employs Levin, Lin, Chu common unit root process and Pedroni Residual Cointegration Test which the results reveal that all the variables in the model are stationary and cointegrated respectively. Data sourced from the World Development Indicators (WDI) were analyzed using Panel Two-Stage Estimated Generalized Least Squares (cross-section Seemingly Unrelated Regression model (SURE)) with Instrumental Variables (IV). The results conform to the liquidity preference theory, with all the variables – inflation, real interest rates, and official exchange rates are statistically significant except real income. It is recommended that the monetary authorities in Africa especially the economies of Nigeria and Ghana should adopt appropriate monetary policies by placing interest rates, inflation and official exchange rates at acceptable levels to boost income through private sector investments.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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