The Demand for Money in Cote d’Ivoire: Evidence from the Cointegration Test.

Drama Bedi Guy Herve, Yao Shen

Abstract


This paper demonstrates that there is a long run equilibrium relationship between money supply  and its main determinants, real income (GDP) and interest rate in Cote d’Ivoire. In order to investigate long-term relationship among these variables, we use Juselius and Johansen cointegration test with time series data covering the period of 1980-2007. The results show that there is long-term relationship among these variables as well as the linkage between them. Base from this result we found that only real money balances  has significant long -run economic impact of variations in monetary policy in Cote d’Ivoire. However, the study also revealed that the effect of aggregate  is not so stable linking with it determinants.


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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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