Inflationary Expectations, Exchange Rate and Demand for Money in Sudan From 1970-2003

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Date
2015-06-16
Authors
Eisa Abd Elmonem, Musa
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Volume Title
Publisher
UOFK
Abstract
The purpose of this study is to estimate the demand for money in Sudan with annual data over the period 1970-2003, using cointegration and error correction methodology. The analysis shows that broad money, income, exchange rate, prices and expected inflation are cointegrated, thus a dynamic model for money demand is specified and estimated using Johansen and Juseluis maximum likelihood cointegration method. The calculated errors from the long-run money demand were then used in the error correction model. The results of the cointegration analysis confirm the existence of a stable money demand. The results of the dynamic model of money demand suggest that money demand is influenced in the short run by income, the expected inflation and the exchange rate a dummy variable was included to allow the short run model to pass diagnosis tests. The policy implications of the study and also pointed out
Description
51page
Keywords
Inflationary Expectations, Exchange Rate ,Demand , Money , Sudan
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