Understanding money demand of Argentina: 1935-2000

Autores
Ahumada, Hildegart; Garegnani, María Lorena
Año de publicación
2002
Idioma
inglés
Tipo de recurso
documento de conferencia
Estado
versión publicada
Descripción
This paper investigates whether or not a simple -Cagan like- econometric model of demand for currency can be developed for Argentina based on more than sixty years of data (1935-2000). For such a long period the presence of structural breaks cannot be ignored given the variety of economic regimes this country has experienced. The purpose is to understand from an "ex-post" perspective how money holdings have reacted to the two main determinants of their demand: a transaction variable and an opportunity cost after suitable approximations for both concepts could be obtained. Transaction elasticity estimates matter for the distribution effects of inflation tax and for measuring the size of the shadow economy. Besides, a comparative analysis of the effect of inflation, interest rates and exchange rates could clarify about the relevant opportunity cost of holding money. Once two values of the transaction elasticity were taken for the long run relationship (1 and 0.5) and inflation and interest rates alternatively measured the opportunity cost of holding money, a stable money demand -a satisfactory approximation to the data generating process- was obtained for the Argentina case.
Departamento de Economía
Materia
Economía
política monetaria
Argentina
econometría
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/3.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/3724
Acceder
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network_name_str SEDICI (UNLP)
spelling Understanding money demand of Argentina: 1935-2000Ahumada, HildegartGaregnani, María LorenaEconomíapolítica monetariaArgentinaeconometríaThis paper investigates whether or not a simple -Cagan like- econometric model of demand for currency can be developed for Argentina based on more than sixty years of data (1935-2000). For such a long period the presence of structural breaks cannot be ignored given the variety of economic regimes this country has experienced. The purpose is to understand from an "ex-post" perspective how money holdings have reacted to the two main determinants of their demand: a transaction variable and an opportunity cost after suitable approximations for both concepts could be obtained. Transaction elasticity estimates matter for the distribution effects of inflation tax and for measuring the size of the shadow economy. Besides, a comparative analysis of the effect of inflation, interest rates and exchange rates could clarify about the relevant opportunity cost of holding money. Once two values of the transaction elasticity were taken for the long run relationship (1 and 0.5) and inflation and interest rates alternatively measured the opportunity cost of holding money, a stable money demand -a satisfactory approximation to the data generating process- was obtained for the Argentina case.Departamento de Economía2002-05info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/3724enginfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2002/trabajo1.pdfinfo:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/Creative Commons Attribution 3.0 Unported (CC BY 3.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-10T11:52:41Zoai:sedici.unlp.edu.ar:10915/3724Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-10 11:52:41.601SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Understanding money demand of Argentina: 1935-2000
title Understanding money demand of Argentina: 1935-2000
spellingShingle Understanding money demand of Argentina: 1935-2000
Ahumada, Hildegart
Economía
política monetaria
Argentina
econometría
title_short Understanding money demand of Argentina: 1935-2000
title_full Understanding money demand of Argentina: 1935-2000
title_fullStr Understanding money demand of Argentina: 1935-2000
title_full_unstemmed Understanding money demand of Argentina: 1935-2000
title_sort Understanding money demand of Argentina: 1935-2000
dc.creator.none.fl_str_mv Ahumada, Hildegart
Garegnani, María Lorena
author Ahumada, Hildegart
author_facet Ahumada, Hildegart
Garegnani, María Lorena
author_role author
author2 Garegnani, María Lorena
author2_role author
dc.subject.none.fl_str_mv Economía
política monetaria
Argentina
econometría
topic Economía
política monetaria
Argentina
econometría
dc.description.none.fl_txt_mv This paper investigates whether or not a simple -Cagan like- econometric model of demand for currency can be developed for Argentina based on more than sixty years of data (1935-2000). For such a long period the presence of structural breaks cannot be ignored given the variety of economic regimes this country has experienced. The purpose is to understand from an "ex-post" perspective how money holdings have reacted to the two main determinants of their demand: a transaction variable and an opportunity cost after suitable approximations for both concepts could be obtained. Transaction elasticity estimates matter for the distribution effects of inflation tax and for measuring the size of the shadow economy. Besides, a comparative analysis of the effect of inflation, interest rates and exchange rates could clarify about the relevant opportunity cost of holding money. Once two values of the transaction elasticity were taken for the long run relationship (1 and 0.5) and inflation and interest rates alternatively measured the opportunity cost of holding money, a stable money demand -a satisfactory approximation to the data generating process- was obtained for the Argentina case.
Departamento de Economía
description This paper investigates whether or not a simple -Cagan like- econometric model of demand for currency can be developed for Argentina based on more than sixty years of data (1935-2000). For such a long period the presence of structural breaks cannot be ignored given the variety of economic regimes this country has experienced. The purpose is to understand from an "ex-post" perspective how money holdings have reacted to the two main determinants of their demand: a transaction variable and an opportunity cost after suitable approximations for both concepts could be obtained. Transaction elasticity estimates matter for the distribution effects of inflation tax and for measuring the size of the shadow economy. Besides, a comparative analysis of the effect of inflation, interest rates and exchange rates could clarify about the relevant opportunity cost of holding money. Once two values of the transaction elasticity were taken for the long run relationship (1 and 0.5) and inflation and interest rates alternatively measured the opportunity cost of holding money, a stable money demand -a satisfactory approximation to the data generating process- was obtained for the Argentina case.
publishDate 2002
dc.date.none.fl_str_mv 2002-05
dc.type.none.fl_str_mv info:eu-repo/semantics/conferenceObject
info:eu-repo/semantics/publishedVersion
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dc.identifier.none.fl_str_mv http://sedici.unlp.edu.ar/handle/10915/3724
url http://sedici.unlp.edu.ar/handle/10915/3724
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2002/trabajo1.pdf
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
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Creative Commons Attribution 3.0 Unported (CC BY 3.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by/3.0/
Creative Commons Attribution 3.0 Unported (CC BY 3.0)
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dc.source.none.fl_str_mv reponame:SEDICI (UNLP)
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repository.name.fl_str_mv SEDICI (UNLP) - Universidad Nacional de La Plata
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