Interest rate, money demand and seigniorage: The Chinese hyperinflation 1946–1949

Onah

African Development Review

et al. 2022

Studies that explore the relationship between financial innovation and the stability of money demand in Africa use the indirect measure of financial innovation. Previous studies on Nigeria also ignored total monetary aggregates (M3), despite its importance to monetary policy formulation and liquidity management. This paper contributes to the existing literature in two ways; first, we expand the generic money demand function to include the direct measure of financial innovation. Second, we test the model on Nigeria using a broader definition of money demand-narrow money (M1), broad money (M2) and total monetary aggregates (M3). We employ the Pesaran et al. (2001) autoregressive distributed lag (ARDL) bounds test approach to cointegration in estimating the respective equations and find evidence of a long-run relationship between money demand and financial innovation. The CUSUM and CUSUM-of-Squares tests reveal stable money demand across the three measures of money demand, which indicates that the inclusion of financial innovation has not altered the long-run stability of money demand in Nigeria.

Section: Literature Reviewmentioning

confidence: 99%

Financial innovation and the stability of money demand in Nigeria

Onah

African Development Review

et al. 2022

“…The author found that M 3 is largely stable due to fundamental factors like opportunity cost and transaction variable, while CIC is unstable due to euro cash changeover and market conditions in an environment of very low interest rates. Zhao and Li (2015) investigated the combined effect of black-market interest rate, seigniorage and money demand on hyperinflation in China and found that Chinese hyperinflation was driven mainly by the government's quest for revenue. Boel (2018) examined the redistributive effect of inflation expectation in Organisation for Economic Co-operation and Development (OECD) countries, using a micro-founded model of money where agents differ in their consumption risk, against which they can insure using money and government bonds.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Effect of financial technology on cash holding in Nigeria

Onah

et al. 2021

AJEMS

PurposeThis paper aims to examine the effect of financial technology on cash holding in Nigeria.Design/methodology/approachThe authors use Pesaran et al.’s (2001) autoregressive distributed lag (ARDL) bounds test approach to cointegration to estimate the long-run relationship between four direct measures of financial technology (automated teller machine [ATM], Internet banking [IB], point of sale [POS] and mobile banking [MB]) and cash holding.FindingsThe authors find the presence of long-run negative relationship between cash holding and the four direct measures of financial technology.Practical implicationsDespite the negative effect of financial technology on cash holding, the descriptive results highlight increasing trajectory in cash holding. This suggests that structural factors such as ethical climate, literacy level, household characteristics, currency denomination structures, economic uncertainty and infrastructure deficit may account for the pervasive cash transactions in Nigeria and not necessarily the unwillingness of economic agents to use digital platform for financial transactions.Originality/valueThis study contributes to existing literature by augmenting the money demand function to accommodate direct measures of financial technology in examining the effectiveness of the policy on cash holding in Nigeria.

“…Jika suatu negara mengalami hiperinflasi, pemerintah akan sulit dalam mendapatkan kepercayaan dari pasar domestik dan internasional yang juga akan berdampak penurunan pada penanaman modal asing (PMA). Seperti yang terjadi di Cina, hiperinflasi Cina didorong oleh upaya pemerintah untuk pendapatan (Zhao & Li, 2015).…”

Section: Pendahuluanunclassified

Analisis Makro Ekonomi Sebelum dan Sesudah Penerapan Redenominasi Mata Uang

Febrida

Sebayang

2018

EDAJ

Abstrak ___________________________________________________________________Rencana redenominasi rupiah di Indonesia menjadikan pengalaman beberapa negara yang telah menerapkan redenominasi mata uang penting untuk ditinjau dari sisi makro ekonomi saat sebelum dan sesudah redenominasi sehingga menjadi dasar pertimbangan bagi Indonesia mengambil keputusan dalam rencana penerapan redenominasi rupiah. Tujuan penelitian ini untuk mengetahui ada tidaknya perbedaan kondisi inflasi, nilai tukar, ekspor, penanaman modal asing (PMA) dan pertumbuhan ekonomi 1 tahun sebelum dan 1 tahun sesudah menerapkan redenominasi pada 20 negara yang telah menerapkan redenominasi. Penelitian ini menggunakan metode penelitian kuantitatif dengan alat analisis uji beda dua rata-rata sampel berpasangan. Hasil analisis menunjukkan bahwa pada variabel nilai tukar terdapat perbedaan antara sebelum dan sesudah redenominasi yaitu nilai tukar semakin lemah setelah penerapan redenominasi, sedangkan pada variabel inflasi, ekspor, PMA, dan pertumbuhan ekonomi tidak terdapat perbedaan sebelum dan sesudah redenominasi. . Abstract ___________________________________________________________________ Rupiah redenomination which planned by Indonesia make the experience of countries that have implemented the currency redenomination is important to be reviewed in terms of macroeconomic before and after the redenomination so that it becomes a basic consideration for Indonesia to take decisions in the plan of implementation rupiah redenomination. The purpose of this study is to determine whether there is difference in the conditions of inflation, exchange rate, exports, foreign direct investment (FDI) and economic growth in