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An Analysis of the Stability of Monetary Aggragates in Botswana

Botswana Journal of Economics

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Field Value
 
Title An Analysis of the Stability of Monetary Aggragates in Botswana
 
Creator Sekwati, L
 
Description This paper seeks to investigate whether M1, M2 and M3 monetary aggregates in Botswana exhibit stability characteristics. Stability of the concerned aggregate implies it has a predictable path and therefore may be used by the authority in making policy decisions. This is achieved by employing stationarity tests and cointegration techniques to monthly data on these aggregates. The results indicate a stable relationship for M2 and M3 aggregates but not for M1, suggesting that M2 and M3 may be used as targets of monetary policy. Although formal tests of convergence on M2 and M3 were not employed, the fact that M3 is made up of Bank of Botswana Certificates among others.It seems reasonable to assume that M3 would be a better target than M2. A potential area for further research may be to assess whether using either of these monetary aggregates to anchor policy would actually work for Botswana, given also the existing trade ties and the exchange rate regime.
 
Publisher The Botswana Economics Association
 
Date 2010-09-30
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.ajol.info/index.php/boje/article/view/60303
10.4314/boje.v5i7.60303
 
Source Botswana Journal of Economics; Vol. 5 No. 7 (2008); 2-13
1810-0163
1810-0163
 
Language eng
 
Relation https://www.ajol.info/index.php/boje/article/view/60303/48545