Since 2014
Modeling Demand for Money in Nepal
Economic Journal of Nepal
View Archive Info| Field | Value | |
| Title |
Modeling Demand for Money in Nepal
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| Creator |
Kharel, Ram Sharan; Research Department, Nepal Rastra Bank, Central Office, Kathmandu
Koirala, Tap Prasad; Research Department, Nepal Rastra Bank, Central Office, Kathmandu |
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| Subject |
Economics
Money demand; Nepal Rastra Bank; Predictable function |
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| Description |
In this paper, we estimate money demand functions for Nepal employing Johansen's tri-variate Conintegration method for the period of 1974/75-2009/10. In line with the previous studies, both narrowly defined real money demand () and broadly defined real money demand () are found to be a stable and predictable function of real income and interest rate albeit disequilibrium corrects more rapidly in compared to . We reject the null hypothesis that income elasticity of money in both functions is unitary with satisfying homogeneous postulates. Further, we reject the null hypothesis that long run determinants of and are weakly exogenous. Based on these findings, we conclude that money demand functions are useful for conducting monetary policy in Nepal. Economic Journal of NepalVol. 34, No. 2, Issue no. 134, 2011
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| Publisher |
Central Department of Economics Tribhuvan University
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| Contributor |
—
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| Date |
2015-09-16
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Identifier |
https://www.nepjol.info/index.php/EJON/article/view/13390
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| Source |
Economic Journal of Nepal; Vol 34, No 2 (2011)
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| Language |
en
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| Coverage |
Nepal
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| Rights |
Copyright (c) 2015 Economic Journal of Nepal
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