The Demand for Money in Greece: Further Empirical Results and Policy Implications

Papadopoulos, Athanasios P.; Zis, George

doi:10.1111/1467-9957.00044

Cited by 11 publications

(7 citation statements)

References 13 publications

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“…21 21 Previous studies of Greek money demand, using narrower aggregates, report the following elasticities. Papadopoulos and Zis (1997) obtain elasticities of 1.49 for M1 and 2.04 for M2. Karfakis (1991) and Psaradakis (1993), both using M1, obtain elasticities of 1.15 and 1.45, respectively.…”

mentioning

confidence: 82%

“…Section III presents the theoretical model. Although recent empirical work on money demand in Greece has mainly focused on the behaviour of the narrower aggregates (Karfakis, 1991; Psaradakis, 1993; Papadopoulos and Zis, 1997), 4 the monetary aggregate used for estimation in this paper is M3, which served as the main aggregate guiding the conduct of monetary policy for much of the period under consideration. Section IV describes the estimation procedures.…”

Section: Introductionmentioning

confidence: 99%

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Empirical Modelling of Money Demand in Periods of Structural Change: The Case of Greece*

Brissimis¹,

Hondroyiannis²,

Swamy³

et al. 2003

Oxf Bull Econ Stat

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This paper examines the behaviour of the demand for money in Greece during 1976Q1 to 2000Q4, a period that witnessed many of the influences that cause money-demand instability. Two empirical methodologies, vector error correction (VEC) modelling and second-generation random coefficient (RC) modelling, are used to estimate the demand for money. The coefficients of both the VEC and RC procedures support the hypothesis that the demand for money becomes more responsive to both the own rate of return on money balances and the opportunity cost of holding money because of financial deregulation. In general, both procedures also support the hypothesis that the income elasticity of money demand declines over time as a result of technological improvements in the payments system and the development of money substitutes, which lead to economies of scale in holding money.*We are very grateful to a referee for insightful comments on an earlier version of this paper. We also wish to thank Stephen Hall and Lawrence Klein for helpful comments. The views expressed are the authors' own and should not be interpreted as those of their respective institutions. JEL Classification numbers: C20, E41.OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 65, 5 (2003) 0305-9049 605

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confidence: 82%

Section: Introductionmentioning

confidence: 99%

Empirical Modelling of Money Demand in Periods of Structural Change: The Case of Greece*

Brissimis¹,

Hondroyiannis²,

Swamy³

et al. 2003

Oxf Bull Econ Stat

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show abstract

“…We do not make any seasonal adjustment to the data prior to empirical implementation using existing standard methods of de-seasonalization. As has been noted byPapadopoulos and Zis (1997), the use of seasonally unadjusted data has an advantage in that the dynamic properties of the model are not distorted.…”

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confidence: 99%

Stock Prices and Bank Loan Dynamics in a Developing Country: The Case of Malaysia

Ibrahim

2006

Journal of Applied Economics

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This paper estimates a six-variable VAR model and simulates generalized impulse response functions to assess dynamic interactions between bank loans and stock prices and evaluate whether bank loans play a role in transmitting financial shocks to the real sector. We find evidence that bank loans react positively to the increase in stock prices but there seems to be no influence from bank loans to stock prices. Similarly, bank loans seem to accommodate expansion in real output with, again, no influence of bank loans on real economic activity. Interestingly, despite the noted currency mismatch of bank assets and liabilities as a factor that aggravates the currency crisis, we find no evidence that the exchange rate fluctuations have impact on bank lending. If anything, the exchange rate seems to affect bank lending activities through its effects on real output and stock prices. From the dynamic responses, we tend to conclude that bank loans play no significant role in transmitting stock market shocks to the real sector. An important implication from our analysis is that the health of the banking sector depends crucially on stock market stability and real output stability. Additionally, policy attempts to stimulate bank loans as a way to boost stock market activities as well as to expand real activities may be futile. JEL classification codes: E44, G21

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“…Similarly, Nagayasu (2003) obtained a near-unit income elasticity estimate of M2 demand for Japan over the 1958-2000 period and, through application of Hansen's (1992) stability tests, revealed that M2 demand is unstable. Papadopoulos and Zis (1997) investigated the determinants and the stability of money demand (M1, M2 and M3) for Greece. Although they find that M2 and M3 are largely stable, they also obtain results which suggest that M1 demand is unstable; this corroborates earlier findings of Sharma (1994).…”

Section: Advanced Countriesmentioning

confidence: 99%

Australasian money demand stability: application of structural break tests

Kumar

Webber

2013

Applied Economics

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The Demand for Money in Greece: Further Empirical Results and Policy Implications

Cited by 11 publications

References 13 publications

Empirical Modelling of Money Demand in Periods of Structural Change: The Case of Greece*

Empirical Modelling of Money Demand in Periods of Structural Change: The Case of Greece*

Stock Prices and Bank Loan Dynamics in a Developing Country: The Case of Malaysia

Australasian money demand stability: application of structural break tests

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