exchange rate volatility and export growth in nigeria this article examines the impact of exchange rate volatility on nigeria s exports to its most important trading partner the united states over the quarterly period january 1980 to april 2001 using cointegration and vector error correction vecm framework empirical tests indicate the presence of a unique cointegrating vector linking real exports real foreign income relative export prices and real exchange rate volatility in the long run furthermore the results show that increases in the volatility of the real exchange rate raise uncertainty about profits to be made which exert significant negative effects on exports both in the short and long run our results also show that improvements in the terms of trade represented by declines in the real exchange rate and real foreign income exert positive effects on export activity most importantly we found that the trade liberalization and economic reform policies implemented in the post 1986 structural adjustment period contributed to nigeria s export

demand for money in open economies abstract the demand for real cash balances deduced from an underlying portfolio model of the financial market is shown to depend upon domestic variables and foreign monetary developments the model is estimated using quarterly postwar data for canada germany uk and us there is clear evidence that demand for money is affected not only by changes in domestic variables such as permanent income domestic interest rate and price expectations but also by fluctuations in exchange rate expectations and foreign interest rates the conclusion that domestic monetary policy is fairly ineffective and domestic financial markets are highly vulnerable to changes in foreign financial and monetary developments need to be modified in light of the results presented in this paper

the demand for money in an open economy the united kingdom most previous studies have estimated the demand for money without paying too much attention to developments in the foreign exchange markets in light of the fact that any development abroad and in the foreign exchange markets could have implications for domestic stabilization we make an attempt to incorporate such developments into the demand for money in the united kingdom more precisely after incorporating a measure of real effective exchange rate of the british pound into a dynamic money demand function we estimated it for the uk using quarterly data over 1973 87 period by relying upon the akaike final prediction error criteria to select the optimum number of lags it is shown that in addition to income and interest rate the real effective exchange rate exerts significant effect on the uk demand for money in the short run as well as long run

long run effects of commodity prices on the real exchange rate evidence from argentina the last commodity boom seems to have been a blessing for many commodity export countries like argentina but it may have also had important effects on the exchange rate and economic structure we develop a cointegration system approach to study a transmission mechanism of commodity prices on the exchange rate we focus on their relationships with agricultural exports and also with oil imports the system approach allows us to obtain consistent estimates of long run effects taking into account possible interactions and testing exogeneity we found that a rise in commodity prices appreciates the exchange rate when controlling by domestic determinants

money demand amid financial sector developments in malaysia both long and short run real money demand functions of malaysia with money variously defined as m0 m1 and m2 have been estimated using the johansen cointegration technique and the general to specific approach respectively the period under review is 1973q1 1991q4 while liberalization and innovation in the malaysian financial system have not ruled out the existence of stable long run money demand relationships as attested to by the presence of cointegrating vectors they have rendered short run relationships unstable hence it may not be appropriate for one to conclude that monetary policy efficacies have been sacrosanct to the financial liberalization and innovation process on the basis of cointegrating relationships this is especially true as monetary policy is essentially a short run stabilization policy aimed at ironing out undue macroeconomic fluctuations this prompted us to re estimate short run money demand functions over more recent periods in order to boost the policy relevance of the estimat

the transactions demand for money in a two currency economy abstract in this paper the model of the transactions demand for money of baumol 1952 is extended to an economy where transactions are conducted in two currencies the currency substitution hypothesis that the domestic demand for domestic money depends on the expected rate of depreciation as well as the domestic rate of interest and level of income is derived from the model in addition several new insights into the implications of currency substitution are provided

secular and cyclical responses of u s trade to income an evaluation of traditional models in the three decades since guy orcutt s 1950 classic paper evaluating empirical research on international trade flows most trade research has focused on the influence of prices in the decade since the benchmark study by houthakker and magee 1969 examination of the role of prices has accelerated although income is consistently the most significant explanatory variable in these studies it is typically introduced only as a background control variable rather than as a variable of central interest the few explicit studies of the link from income to trade either use proxies such as delivery lags and inventory ratios to investigate the dynamics of the link e g gregory 1971 and artus 1973 or decompose income into trend deviation from trend and in one instance change in deviation from trend in an attempt to separate the secular and business cycle components e g ball eaton and steuer 1966 khan and ross 1975 and dunlevy 1980 stephen magee 1975 pp 188 193 211 214 provides a persuasive rationale for at least the spirit of the second line of research arguing that trade flows respond differently to secular and business cycle income changes and that regression estimates with income in level form mix these effects time domain decomposition is now an established practice with the trend response identified with secular forces like comparative advantage hence could be positive or negative in either demand or supply the deviation from trend response with a business cycle keynesian mechanism hence is likely to be positive in demand and negative in supply and the change in deviation from trend response with a sneed of adjustment constraint hence is likely to be negative the most recent evidence bearing on these issues is provided by dunlevy 1980 who finds that the effect of the business cycle income proxy deviation fromtrend income on the supply of exports for the united states and the united kingdom is positive rather than negative evidence contradicting both theory and evidence in earlier capacity pressure studies in this paper we first evaluate traditional regression estimates of income elasticities of demand and supply for u s imports and exports from 1955 to 1979 then compare these estimates to cross spectral estimates of the secular and business cycle responses of trade to income the spectral technique is used because by definition the approach estimates separately the secular and business cycle links between trade and income if the response of trade to movements in income does differ over cycles regression estimates of income elasticities may reflect bias and instability due to cycle varying parameters regression elasticity estimates with income in trend and deviation from trend forms do provide separate estimates but the decomposition is useful only to the degree that the two variables are accurate proxies for secular and business cycle movements in income it should be emphasized that we are not using spectral analysis to detect lead lag properties since these are more directly obtained in the time domain and are relatively trivial for our sample the unique advantage of spectral analysis is that it isolates secular and business cycle components directly even when the time domain link is only contemporaneous the paper is organized as follows section ii presents and evaluates time domain estimates of standard demand and supply equations for u s imports and exports and presents caveats regarding interpretation of the trend and deviationfrom trend income variables section iii proreceived for publication march 4 1981 revision accepted for publication may 12 1982 university of oregon an earlier draft of this paper was presented at the fall 1980 north american meeting of the econometric society we acknowledge helpful comments from s y kwack john mutti and two anonymous referees we also thank john pippenger for supplying the spectral program specx68 and the university of oregon for a faculty research grant remaining errors are solely ours i application of spectral methods to investigate trade income links was first suggested by ball eaton and steuer 1966 p 503 they were unable to use the technique however because the data series available at that time were too short

empirical investigation of one opec country s successful non oil export performance abstract this study examines indonesian non oil export success between 1975 and 1994 with a focus on the role of exchange rate management and trade policy in export performance across sectors to examine the link between export quantity and changes in policy i estimate structural export supply functions that are derived from utility and profit maximization behavior the results indicate that non oil exporters respond positively to improved price incentives including exchange rate devaluation with the strongest impact in textiles garments and sawnwood the study offers a richer description than previous work of the relationship between price incentives and export performance

evidence on nonlinear error correction in money demand the case of taiwan this paper proposes a nonlinear error correction model based upon smooth transition regression methodology the model is specified such that the short run adjustment toward long run equilibrium is nonlinear and that the error correction is a smooth function of long run deviation empirical results obtained from estimating m2 money demand in taiwan support the hypothesis of a nonlinear error correction process and provide better interpretation of change in the demand for money

a differentiated good model of coffee and cocoa exports with reference to the cfa franc zone this paper employs the trade shares methodology to estimate export functions for coffee and cocoa classified according to the market in which they are sold because two of the major coffee and cocoa exporting nations belong to the cfa franc zone we investigate the impact of zone membership on export flows for these two commodities our results confirm the theoretical predictions that relative prices and market size are important determinants of exports moreover participation in the zone has on the whole been beneficial to the exports of its members finally our study contributes to the literature on the impact of exchange rate variability on trade flows it demonstrates that exchange risk depressed the volume of coffee and cocoa exports displaying a more pronounced impact on zone member exports

exchange rate volatility and foreign trade evidence from thirteen ldc s this article investigates empirically the impact of real exchange rate volatility on the export flows of 13 less developed countries ldc s over the quarterly period 1973 1996 estimates of the cointegrating relations are obtained using johansen s multivariate procedure estimates of the short run dynamics are obtained for each country using the error correction technique the major results show that increases in the volatility of the real effective exchange rate approximating exchange rate uncertainty exert a significant negative effect on export demand in both the short run and the long run in each of the 13 ldc s these effects may result in significant reallocation of resources by market participants

estimating money demand functions the question of which functional forms of money demand regression equations are useful for empirical work is addressed here specifically it is argued that a functional form that focuses attention on the ability of the growth rate of nominal money to predict the inflation rate is a useful way of summarizing empirical evidence on the existence of a stable money demand function the results of estimating and simulating this functional form as well as standard functional forms are presented in the final part of this paper a typical equation expressing the public s demand for real money balances m is as follows

determinants of international trade flows this paper models and estimates import demand and demand for export functions for 19 industrial countries although primary emphasis is placed on the period of generalized floating exchange rates 1972 through 1980 estimates are also provided for the fixed exchange rate years 1957 1970 thus making possible a comparison between the two eras aside from the conventional income and price variables the paper assesses the effect of variations in the exchange rate and in the expected exchange rate on real trade flows additionally it estimates an unrestricted lag structure of the effect of price and exchange rate variations on imports

performance measurement expectancy and agency theory an experimental study theoretical analyses of optimal performance measures are typically performed within the realm of the linear agency model this model implies that for a given compensation scheme the agent s optimal effort is unrelated to the amount of noise in the performance measure in contrast expectancy theory as developed by psychologists predicts lower effort levels for noisier performance measures we conduct a real effort laboratory experiment and find that effort levels are invariant to changes in the distribution of the noise term i e to expectancy this suggests that enriching the economic linear agency model commonly applied within this area by including an expectancy parameter is not needed

modelling money demand in open economies the case of selected asian countries while early work on money demand estimation focused primarily on the importance of domestic variables many studies in later years have suggested that foreign variables also influence the domestic demand for money in an open economy with the rapid financial market liberalization in some of the asian economies in the last couple of decades open economy factors have become very important in the determination of money demand therefore this paper aims to ascertain the degree to which foreign opportunity cost variables influence money demand in the philippines singapore and south korea cointegration analysis is performed and an error correction model estimated using quarterly time series data the empirical results support the inclusion of foreign opportunity cost variables in the money demand function

exchange rate sensitivity of the demand for money in spain 1998 exchange rate sensitivity of the demand for money in spain applied economics vol 30 no 5 pp 607 612

generalized functional forms and demand for money in an open economy the case of the united kingdom the purpose of this paper are twofold first to apply a box cox model to the uk money demand relationship within an open economy framework in order to empirically investigate the proper functional form supported by the data in this general setting secondly to test for the porper scale variable in the uk money demand function within the open economy box cox specification these improvements enhance the accuracy of our measures of monetary and fiscal policy effects and our understanding of the interdependence between different economies the empirical results derived here reject the restrictive linear and log specifications in favour of the general box cox model under both income and consumption based money demand specifications the traditional income based model however escaps unharmed from the challenge put forward by mankiw and summers 1986

portfolio behaviour in a flow of funds model for the household sector in india we estimate a flow of funds model for the household sector in india within the almost ideal demand system aids framework and examine the demand for money and the substitution effects between money and other financial assets the restricted long run model obtained using cointegration techniques provides stable equilibrium relationship between i 1 variables and broadly satisfies the axioms of rational choice in consumer demand theory we find that financial sector reform exerts a significant impact on the interest rate structure and household portfolio preferences specifically there is strong substitutability among risk free assets and a possible speculative effect in the stock market while the exchange rate strongly influences the demand for money these findings all have important policy implications

how well does the mundell fleming model fit australian data since the collapse of bretton woods australian time series for the nominal interest rate real output the nominal exchange rate prices and nominal money since 1973 are characterized by a vector autoregressive process driven by five exogenous disturbances those disturbances are identified so that they can be interpreted as the five main sources of fluctuations found in the mundell fleming model of a small open economy under flexible exchange rates namely world interest rate aggregate supply is money supply and money demand shocks the dynamic responses of the estimated model to the structural shocks are analysed and shown to match most of the predictions of the mundell fleming model

determinants of international trade flows the case of developing countries abstract the question of magnitude and the time path of the trade flows to changes in the exchange rates and to changes in the price level is of emitent practical importance to assess the above proposition a distributed lag structure is imposed on the relative prices and on the effective exchange rate as the determinants of trade flows then import and export demand functions are estimated for a sample of developing countries using the almon procedure the empirical findings appeared to sustain orcutt s early conjecture that trade flows adjust differently to different price stimuli more precisely it was found that imports and exports reactions were quicker and the total response time was shorter when an exchange rate rather than relative prices caused a change in international prices

the impact of economic and monetary uncertainty on the demand for money in emerging economies by introducing uncertainty monetary volatility and economic volatility are said to make the public cautious hence increase their cash holdings or their demand for money on the other hand because of monetary and economic uncertainty if the public seek safer assets than money they may hold less cash in the absence of any paper testing for the impact of economic and monetary uncertainty on the demand for money in emerging economies this article fills the gap by considering the experiences of six central and eastern european emerging economies and four other emerging economies we found that the impact is transitory in most countries moreover money demand is found correctly specified and stable in most countries suggesting that policy based on monetary targeting could still be effective despite significant output and monetary uncertainty

modelling export prices and quantities in a small open economy volvement by u s manufacturing industry oxfjord economic papers 32 mar 1980 102 122 lindenberg eric b and stephen a ross tobin s q ratio and industrial organization journal of business 54 jan 1981 1 32 marvel howard p foreign trade and domestic competition economic inquiry 18 jan 1980 103 122 thomadakis stavros b a value based test of profitability and market structure this review 59 may 1977 179 185

stability of the money demand function in asian developing countries previous studies that estimated the money demand function in asian developing countries either employed traditional estimation techniques or recently popularized cointegration technique while the first group suffers from spurious regression problems the second group interpreted their finding of cointegration as a sign of stability of estimated parameters this study after incorporating the cusum and cusumsq tests into cointegration analysis shows that in some asian countries even though real m1 or m2 monetary aggregates are cointegrated with their determinants the estimated parameters are unstable

the financial structure and the demand for money in thailand this paper uses recently developed econometric techniques to investigate the demand for money in thailand initial estimates show the absence of any long term unique relationship among a monetary aggregate m1 or m2 an income and a price variable however the introduction of an exchange rate in the above relationship shows the presence of a cointegrating relationship this provides some support to mckinnon s hypothesis of currency substitution it also raises some concern about the closed economy focus of earlier studies on money demand in thailand addition of a foreign interest variable to the above models provide some support to the capital mobility hypothesis the long run elasticity estimates for the m1 equation raise some doubts about the desirability of using this monetary aggregate as an intermediate target by the bank of thailand the null hypothesis of a unit income elasticity and zero foreign interest elasticity are not rejected but the hypothesis of price homogeneity is rejected moreover

effects of exchange rate flexibility on the demand for international reserves abstract we incorporate a measure of exchange rate flexibility into the standard reserve demand equation and present empirical results for the 1976 1985 period which are consistent with the work of officer 1976 and frenkel and jovanovic 1981 indicating the existence of economies of scale and the demand for reserves

monetary economic myth and econometric reality few of the main macro economic forecasting systems can produce sensible forecasts without the tender loving care of their proprietors many econometric equations in com mon use show significant deterioration in the accuracy with which they characterise data as time passes and many economists are sceptical about empirical evidence feeling it lacks credibility monetary relationships have the dubious distinction of being among the leaders in this field as witnessed by the very large mispredictions of m1 models in the usa over what is now known as the missing money period 1973 76 as well as during the recent great velocity decline 1979 82 in the uk models of m1 and m3 demand experienced large structural breaks following the competition and credit control regu lation changes and the move to floating exchange rates perhaps it is no surprise that goodhart s law should have been formulated with respect to money demand equations

determinants of the demand for thailand s exports of tourism we investigate the effects of world income and the relative price of tourism in thailand on thailand s exports of tourism in contrast to previous studies we test for stationarity and cointegration of the variables of the model we find that the variables are not stationary in level form but they are cointegrated our estimate of the relative price elasticity of demand for thailand s exports of tourism is 1 199 in the short run and 0 891 in the long run the corresponding estimates for the income elasticity of demand are 1 926 and 2 342 respectively however only the short run price elasticity of demand is significantly different from zero

realizing fair outcomes in minimum cost spanning tree problems through non cooperative mechanisms abstract in the context of minimum cost spanning tree problems we present a bargaining mechanism for connecting all agents to the source and dividing the cost among them the basic idea is very simple we ask each agent the part of the cost he is willing to pay for an arc to be constructed we prove that there exists a unique payoff allocation associated with the subgame perfect nash equilibria of this bargaining mechanism moreover this payoff allocation coincides with the rule defined in bergantinos and vidal puga bergantinos g vidal puga j j 2007a a fair rule in minimum cost spanning tree problems journal of economic theory 137 326 352

long run price and income elasticities of demand for hong kong exports a structural cointegrating var approach this article revisits a system of export volume and price equations to estimate the long run price and income effects in the demand for hong kong s exports using a recently developed restricted cointegrating var approach it tests theorybased restrictions and obtains estimates of the long run structural coefficients the estimation results provide supporting evidence for the theory based restrictions and suggest that the demand for hong kong s exports is both price and income elastic this article is therefore able to present a long run model of hong kong s exports that is both theory and data consistent and long run elasticities that are economically interpretable the short run properties of the model are illustrated by means of persistence profiles which confirm the cointegrating vectors tendency of convergence

do exchange rate changes have symmetric or asymmetric effects on the demand for money in turkey as a result of the research conducted by nobel laureate robert mundell 1963 most studies estimating the demand for money today do include the exchange rate in their specification to account for currency substitution previous studies that did this for the turkish demand for money assumed that exchange rate changes do have symmetric effects on the demand for money in turkey in this article we question this assumption by using the nonlinear ardl approach we show that indeed exchange rate changes do have short run and long run asymmetric effects on the m1 demand for money introducing nonlinearity also yields a stable money demand

how stable is the demand for money in emerging economies one of the key elements of implementing the monetary policy is stability of the demand for money the literature includes a large number of studies that have tested the stability of the money demand in developed as well as less developed countries but not in emerging economies of eastern europe as market based data becomes available from these countries there is an urgency to test old theories for these modern market oriented economies in this article we consider the experiences of armenia bulgaria the czech republic hungary poland russia and the slovak republic using the bounds testing approach to error correction modelling and cointegration we show that money demand is stable in these countries

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

the supply and demand for imports and exports in a simultaneous model previous studies on the behaviour of aggregate exports and imports have tended to ignore the simultaneous relationship between quantity and price this paper investigates the price responsiveness of export and import demand and supply in eight african countries the results indicate that export demand price elasticities are smaller when the sample is african the import supply and demand elasticities were found to be generally large the marshall lerner condition of balance of payment stability is found to be easily satisfied a positively sloped function of export supply is found to exist for a majority of countries in the sample the average time lag of export supply is found to be about a year the disequilibrium model is found to be more appropriate for import demand import supply and export supply

the money demand function in a small open and quasi monetary economy the gambia the open economy money demand asserts that for its underlying theory to hold the variables ought to be co integrated co integrated variables although nonstationary in level can share a long term trend that is indeed stationary however the open money demand model has mainly been tested in developed and developing nations this article investigates the co integrated open economy money demand in the gambia where the macro economy is a quasi monetary system small relative to the world market but very open with a floating exchange rate regime in the co integrated space the gambian money demand appears to be quite responsive to domestic income a measure of interest rate and the real exchange rate fluctuations

cost monotonicity consistency and minimum cost spanning tree games abstract we propose a new cost allocation rule for minimum cost spanning tree games the new rule is a core selection and also satisfies cost monotonicity we also give characterisation theorems for the new rule as well as the much studied bird allocation we show that the principal difference between these two rules is in terms of their consistency properties

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

economic policy uncertainty and demand for money in australia abstractthe demand for money has received a great deal of attention in the empirical literature this literature however has emphasized factors such as interest rate income inflation rate and e

reconsidering pay dispersion s effect on the performance of interdependent work reconciling sorting and pay inequality pay dispersion in interdependent work settings is virtually universally argued to be detrimental to performance we contend however that these arguments often confound inequality with inequity t

cointegration real exchange rate and modelling the demand for broad money in japan the literature on the demand for the japan s broad money addresses two controversial issues the form log level or log difference in which variables enter the money demand function and the question of whether financial innovation and deregulation caused shift s in the money demand relationship log level specifications of the money demand function have been shown to exhibit large shifts whereas log first differences and error correction specifications do not our paper demonstrates that the appropriate specification for the japanese money demand function is that which uses cointegration and error correction procedures

specification of supply behavior in international trade supply behavior in international trade has been notoriously difficult to capture empirically indeed so few published supply studies exist that stern francis and schumacher s 1976 bibliographical survey of price elasticities in international trade devotes over 350 pages to demand estimates but barely 10 pages to supply estimates in recent years only goldstein and khan 1978 and dunlevy 1980 using simultaneous equation estimation techniques have reported estimates of supply behavior in international trade exogenous shocks to demand and supply for traded goods in general influence both quantity and price for supply estimates it is unclear a priori whether the response is more appropriately specified with quantity or price as the dependent variable however if supplying firms in an uncertain world pursue pricing strategies based on past market performance as in zabel 1981 the appropriate specification is a supply price equation in this case prices respond to lagged quantities which implies that the traditional supply quantity specification with present and past prices as explanatory variables cannot capture the dynamic supply behavior in this study we explore the hypothesis that previous attempts to estimate supply behavior have generally failed not only because of the well known problem of simultaneity bias but also because quantity rather than price was specified as the dependent variable section ii presents and discusses traditional supply quantity equations based on quarterly data for aggregate exports and imports for the united kingdom and the united states from 1947 to 1979 section iii briefly discusses the theoretical rationale of a supply price specification and presents estimates of supply price equations based on the same data section iv evaluates the empirical evidence to determine whether a supply quantity or supply price formulation is more appropriate and compares estimates of long run price elasticities of supply based on the two approaches a final section summarizes the conclusions

exchange rate versus credit policy analysis with a monetary model of trade and inflation in india abstract a general equilibrium model of the trade balance and inflation in india is specified and empirically analyzed the model takes into account many important institutional features of india such as foreign exchange rationing and emphasizes the effects of monetary disequilibrium on the trade balance policy simulations compare the dynamic responses to devaluation with the responses to tight credit policy it is shown that the relative price effects of policies are often significantly offset by perverse liquidity effects which serve to raise absorption however the trade balance effects of devaluation are found to be more enduring than those of tight credit policy

axiomatization of the shapley value on minimum cost spanning tree games abstract this paper axiomatizes the shapley value on minimum cost spanning tree games by using axioms which are different from those used in network games journal of economic literature classification numbers c71 a14

a re examination of the demand for money in small developing economies this paper re examines the money demand function in three small open economies of asia korea pakistan and singapore in addition to using the relatively new procedure of error correction modelling the roles of variables such as a the expected change in the exchange rate b foregin interest rates and c foreign exchange risks on money demand are examined in testing the importance of these variables in the money demand function special attention is paid to testing the assumptions of the classical linear regression model the sample period for each country spans from 1973 1 through 1990 1 the empirical results suggest that the error correction specification performs very well in addition to the traditional variables the results suggest that at least some measure of foreign monetary developments appear to have some significant effect on money demand behaviour in these small developing economies

a strategic model of social and economic networks we study the stability and efficiency of social and economic networks when self interested individuals can form or sever links first for two stylized models we characterize the stable and efficient networks there does not always exist a stable network that is efficient next we show that this tension persists generally to assure that there exists a stable network that is efficient one is forced to allocate resources to nodes that are not responsible for any of the production we characterize one such allocation rule the equal split rule and another rule that arises naturally from bargaining of the players

currency substitution and nonlinear error correction in taiwan s demand for broad money we modify the conventional money demand function by including a real exchange rate variable to reflect the effect of currency substitution empirical evidence indicates that the variable is crucial to the long run stability of taiwan s money demand after finding the failure of a linear error correction model ecm in describing the dynamics of taiwan s money demand we apply a nonlinear ecm to examine its dynamics and support the appropriateness of the nonlinear model empirically

testing for the stability of money demand in italy has the euro influenced the monetary transmission mechanism stability of money demand is a crucial issue for the efficacy of monetary policy this is particularly true in the presence of significant exogenous shocks to the monetary system by implementing the most recent econometric testing procedures this article intends to investigate the consistency of the stability of money demand in italy one of the larger european monetary union emu countries before and after the emu among others the objective is indeed to ascertain the effect of a change in the currency regime on the monetary aggregates and to provide a valid empirical model which is a viable tool for policy performance

exchange rate sensitivity of the demand for money in developing countries there is consensus among researches that under the present floating exchange rate system although developing countries peg their exchange rate to a major currency they cannot avoid fluctuation in their effective exchange rates as long as major currencies fluctuate against one another few authors have investigated the effects of changes in effective exchange rates of developing countries on their imports exports trade balance demand for international reserves inflation etc in this paper we try to inestigate the effects of effective exchange rates of developing countries on their demand for money previous authors who have estimated a money demand function inclusive of an exchange rate variable bilateral or effective have restricted themselves to industrial countries only by using quarterly data over the 1973 85 period it is shown that in most developing countries while the short run effcts of depreciation could be in either direction its long run effects are negative indicating that deprecia

signaling in secret pay for performance and the incentive and sorting effects of pay secrecy although the vast majority of u s firms follow a policy of pay secrecy research provides a limited understanding of its overall utility to organizations building on signaling theory we develop

exchange rate sensitivity of demand for money and effectiveness of fiscal and monetary policies one of the arguments between proponents and opponents of floating exchange rates centres around the relative effectiveness of fiscal and monetary policy while proponents of floating rates argue that monetary policy is more effective under floating rates its opponents contend that fiscal policy is more effective under fixed rates however economic theory suggests that there is room for both policies under both types of exchange rate system depending upon degree of sterlization concentrating on the floating rates mundell 1963 has argued that the relative effectiveness of monetary and fiscal policies would also depend upon sensitivity of money demand to exchange rate more precisely he has conjectured that the demand for money is likely to depend upon the exchange rate in addition to the interest rate and the level of income this would slightly reduce the effectiveness of a given change in the quantity of money and slightly increase the effectiveness of fiscal policy on income and employment under

stagflationary effects of monetary stabilization policies a quantitative analysis of south korea this paper presents a macro model of the korean economy that focuses on short run macro economic adjustment and more in particular on the transmission channels of monetary policy between the financial and the real sector of the economy in addition to the usual link between monetary policy and aggregate demand via investment the link between monetary policy and the supply side of the economy via the financing of working capital with borrowed funds is incorporated this link can potentially reverse the short run impact of tight money on inflation and aggregate the impact on output both export prices and domestic prices show a significant sensitivity to cost of financing working capital this credit supply side link gives a stagflationary bias to restrictive credit policies the empirical relevance of this phenomenon is strongly supported by the simulation results derived with the model structurally section 2 of the paper focuses on the real sector part of the model section 3 discusses the financial sector in section 4 different monetary stabilization packages are simulated using the model presented in sections 2 and 3 and alternative policy measures are discussed the simulation runs show strong short run stagflationary effects of tight money policies

the interpretation of test statistics this paper investigates what can and cannot be learned from specification testing it focuses on the determinants of non centrality parameters which in turn determine the power of test statistics when the sample is large and the truth is close to the null hypothesis the squared cosine of a certain angle which also has a simple interpretation in terms of artificial regressions turns out to play a crucial role tests of regression models are divided into two types tests against regression directions and tests against non regression directions a number of useful specification tests of each type are discussed with emphasis on their power when the truth is not an alternative against which they were constructed l interpretation des tests statistiques ce memoire examine ce qu on peut et ne peut pas

effect of the global financial meltdown on india s aggregate export volumes this paper sets up a demand supply model to analyse india s export performance in terms of volumes rather than values between 2000q1 2014q4 the main objective is to determine the impact of the f

minimum cost arborescences in this paper we analyze the cost allocation problem when a group of agents or nodes have to be connected to a source and where the cost matrix describing the cost of connecting each pair of agents is not necessarily symmetric thus extending the well studied problem of minimum cost spanning tree games where the costs are assumed to be symmetric the focus is on rules which satisfy axioms representing incentive and fairness properties we show that while some results are similar there are also signifcant differences between the frameworks corresponding to symmetric and asymmetric cost matrices

policy uncertainty and the demand for money in the united kingdom limited studies that have assessed the impact of economic uncertainty on the demand for money have concentrated on using a volatility measure of money supply and output certainly other factors such as regulation taxes budget deficits national debt etc can contribute to an uncertain environment this new measure of uncertainty which is called policy uncertainty is now constructed for several countries and published we investigate the impact of this new measure on the demand for money in the uk and find that it has a negative and significant short run effect but not any log run effects