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Volume
1, No. 2,
August 2002
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Long-Run Demand for Money in Hong
Kong: An Application of the ARDL Model
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Mohsen
Bahmani-Oskooee*
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Department of Economics, University of
Wisconsin-Milwaukee, U.S.A.
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Raymond Chi
Wing Ng
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Centre for Asian Pacific Studies, Lingnan
University, Hong Kong
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Abstract
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We
examine the long-run demand for money of Hong Kong
using the autoregressive distributed lag (ARDL)
cointegration procedure on quarterly data over the
period 1985Q1-1999Q4. Estimation results suggest
that HK$M2 is cointegrated with its determinants. In
addition, the CUSUM and CUSUMSQ tests confirm the
stability of the money demand function.
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Key words
:
money demand; Hong Kong;
cointegration; error correction model; CUSUM test
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JEL
classification
:
C12; C22; E41
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