Money demand and inflation in Madagascar
By: prepared by Koffie Nassar.
Contributors: International Monetary Fund. African Dept.
Series: IMF working paper -- WP/05/236
Publisher: International Monetary Fund, African Dept.
Published: 2005
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 23
Subjects: Demand for money -- Madagascar -- Econometric models.; Inflation (Finance) -- Madagascar -- Econometric models.
Description: This paper uses a two-sector model to estimate the relationship between prices, money, and the exchange rate in Madagascar during the period 1982-2004. The estimated model, using quarterly data, finds a stable long-run relationship among monetary aggregates, domestic prices, real income, and foreign interest rates. In addition, the error-correction model shows that changes in the monetary aggregates, the exchange rate, and foreign interest rates exert a significant impact on inflation. The results also suggest that a disequilibrium in the money market has a lasting impact on inflation. The paper concludes with policy recommendations.
Notes: "December 2005."

Includes bibliographical references (p. 22-23).

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