publication . Article . 2012

EXOGENOUS OR ENDOGENOUS MONEY SUPPLY: EVIDENCE FROM AUSTRALIA

ZATUL E. BADARUDIN; AHMED M. KHALID; MOHAMED ARIFF;
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  • Published: 01 Jan 2012 Journal: The Singapore Economic Review, volume 57, page 1,250,025 (issn: 0217-5908, eissn: 1793-6837, Copyright policy)
  • Publisher: World Scientific Pub Co Pte Lt
Abstract
<jats:p> This paper investigates the nature of money supply in Australia over two separate monetary policy regimes: monetary and inflation targeting. The post-Keynesian theory on endogenous money was tested with the aim of investigating whether endogenous money supply, if it did exist, followed the accomodationist, structuralist or liquidity preference viewpoints. Data used are quarterly series from 1977 to 2007 and we used vector error-correction model for long-run and short-run causality tests. We found that money supply is endogenous in Australia even when the central bank targeted monetary aggregates during the period 1977 to 1993. </jats:p>
Subjects
free text keywords: Post-Keynesian, endogenous money supply, vector error-correction model, E12, E51, Economics and Econometrics, Causality, Liquidity preference, Inflation targeting, Central bank, Macroeconomics, Post-Keynesian economics, Endogenous money, Economics, Monetary policy, Monetary economics, Money supply, International trade, business.industry, business
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publication . Article . 2012

EXOGENOUS OR ENDOGENOUS MONEY SUPPLY: EVIDENCE FROM AUSTRALIA

ZATUL E. BADARUDIN; AHMED M. KHALID; MOHAMED ARIFF;