THE STABILITY OF MONEY DEMAND FUNCTIONS: MÉXICO, 1986-2002.

Authors

  • André Varela Mollick Instituto Tecnológico y de Estudios Superiores de Monterrey - Campus Monterrey

Keywords:

Direito Tributário, Teoria dos Sistemas, Análise econômica

Abstract

Over the years 1989-1993, Mexico underwent financial liberalization, privatization of commercial banks, and opening to foreign markets. Using Mexican montly data over 1986-2002, this paper studies several money demand specifications. The benchmark vectors have currency strongly cointegrated with income (from 0.75 to 1.15), interest rate (from -0.03 to -0.05), and inflation rate (about 0.29), while specifications with M1 and M2 fail. A coefficient of 0.59 of the currency-money ratio (CUR/M1) would suggest that when the ratio falls (financial innovations rise), the demand for currency falls, but the evidence is weak. Several stability tests are performed around the 1991 episode of "M1 explosion" and around the 1994 currency crisis. These do not detect structural change in the latter for the traditional models but do so in the former for all models. The traditional models are thus not worse than the financial innovations one, perhaps because the financial innovations term is contaminated by factors related to the money supply process.

Downloads

Download data is not yet available.

Downloads

Published

2013-09-13

Issue

Vol. 3 No. 3 (2003)

Section

Artigos

License

The submission of a manuscript authorizes its publication by the Brazilian Journal of Business Economics/Revista Brasileira de Economia de Empresas and implies that it refers to original work, which is not currently submitted to any other journal. It is forbidden any reproduction, partial or total, by any other media, either press or digital, of the published papers. In this case, previous and necessary authorization must be requested. In case it is obtained, one must include a formal acknowledgement to the BJBE/RBEE, which is the first publisher of the paper. The BJBE/RBEE does not pay any copyright to the authors of published papers.

Copyright and Licensing

The copyrighter of the BJBE/RBEE is the Editora Universa of the Universidade Católica de Brasília.

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Submitting an article authorizes its publication and implies a commitment that the same material will not be submitted to another journal.

The journal does not pay royalties to the authors of published articles.