The impact of symmetric and asymmetric exchange rate fluctuations on demand for money in Pakistan.
A growing body of recent literature identifies the exchange rate as an important determinant of demand for money along with income and interest rate, but these studies assume the symmetric effect of exchange rate on demand for money. In contrast, this study argues that the exchange rate can have an...
| Publicado en: | Journal of the Asia Pacific Economy Vol. 28; no. 1; pp. 261 - 284 |
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| Autores principales: | , |
| Formato: | Artículo |
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Taylor & Francis Ltd
Feb2023
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=161831640&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 161831640 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 13547860 5BJ jtl: Journal of the Asia Pacific Economy issn: 13547860 maglogo: N pubinfo: dt: Feb2023 vid: 28 iid: 1 pid: 377 pub: Taylor & Francis Ltd artinfo: ui: 161831640 10.1080/13547860.2021.1880040 ppf: 261 ppct: 23 formats: tig: atl: The impact of symmetric and asymmetric exchange rate fluctuations on demand for money in Pakistan. aug: au: Hannan, Abdul Ishaq, Tahira affil: Economics Discipline, Newcastle Business School, University of Newcastle, Newcastle, Australia su: Pakistan Money supply Depreciation Foreign exchange rates Interest rates Demand for money Monetary policy Demand function sug: subj: Money supply Pakistan Depreciation Foreign exchange rates Interest rates Demand for money Monetary policy Demand function keyword: Asymmetric ARDL exchange rate monetary policy money demand function Asymmetric ARDL exchange rate monetary policy money demand function ab: A growing body of recent literature identifies the exchange rate as an important determinant of demand for money along with income and interest rate, but these studies assume the symmetric effect of exchange rate on demand for money. In contrast, this study argues that the exchange rate can have an asymmetric effect on money demand. Therefore, we estimate the symmetric and asymmetric impact of real effective exchange rate on demand for money from 1974 to 2019 for Pakistan using the symmetric and asymmetric autoregressive distributed lag model (ARDL). The estimated symmetric ARDL model shows insignificant impact of the real effective exchange rate on demand for money while the asymmetric ARDL results show that the impact of currency depreciation on money demand is positive and significant, suggesting substitution effect. Moreover, the stability of the money demand function highlights the role of monetary aggregates in the conduct of monetary policy. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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