Money demand and inflation in dollarized economies
Subtitle: the case of Russia
By: prepared by Nienke Oomes and Franziska Ohnsorge.
Contributors: Ohnsorge, Franziska.; International Monetary Fund. European Dept.
Series: IMF working paper -- WP/05/144
Publisher: International Monetary Fund, European Dept.
Published: 2005
Place of publication: Washington, D.C
Language: eng
Number of pages: 30
Subjects: Demand for money -- Russia (Federation); Inflation (Finance) -- Russia (Federation); Currency substitution -- Russia (Federation)
Description: Money demand in dollarized economies often appears to be highly unstable, making it difficult to forecast and control inflation. In this paper, we show that a stable money demand function for Russia can be found for "effective broad money," which includes an estimate of foreign cash holdings. Moreover, we find that an excess supply of effective broad money is inflationary, while other excess money measures are not, and that effective broad money growth has the strongest and most persistent effect on short-run inflation.
Notes: "July 2005."

Includes bibliographical references (p. 28-30).

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