POLICY UNCERTAINTY AND THE DEMAND FOR MONEY IN SINGAPORE: AN ASYMMETRIC ANALYSIS

2021 ◽  
pp. 1-16
Author(s):  
MOHSEN BAHMANI-OSKOOEE ◽  
MUHAMMAD AFTAB ◽  
SAHAR BAHMANI
Keyword(s):  
Money Supply ◽  
Policy Uncertainty ◽  
Demand For Money ◽  
The Public ◽  
Uncertainty Measures ◽  
Long Run ◽  
Almost All ◽  
Measure Of Uncertainty

In search of a stable demand for money, almost all previous studies include two uncertainty measures captured by the volatility of the money supply and output. While in some countries, this yielded a stable demand for money, in some others, it did not. The latter was the case for Singapore. In this paper, we use a relatively more new and comprehensive measure of uncertainty known as policy uncertainty that is a news-based measure, and revisit the demand for money in Singapore. Our approach not only yields a stable demand for money in Singapore, but also reveals that the long-run effects of policy uncertainty on the demand for money are asymmetric. While increased uncertainty induces the public in Singapore to hold more money, decreased uncertainty does not affect.

scholarly journals Asymmetric Effects of Policy Uncertainty on the Demand for Money in the United States

2018 ◽  
Vol 12 (1) ◽  
pp. 1 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Majid Maki-Nayeri
Keyword(s):  
Money Demand ◽  
The United States ◽  
Economic Factors ◽  
Policy Uncertainty ◽  
Demand For Money ◽  
The Public ◽  
Asymmetric Effects ◽  
Long Run ◽  
Clear Sign ◽  
Macro Variables

A comprehensive measure of economic uncertainty, known as “Policy Uncertainty”, which was constructed by the Economic Policy Uncertainty Group by searching popular newspapers for uncertain terms associated with economic factors and its impact on macro variables, is gaining momentum. Although some researchers have assessed its impact on the demand for money in a few countries, we considered the U.S.A. demand for money one more time and showed that when a linear money demand was estimated, policy uncertainty had no long-run effects. However, when a nonlinear model was estimated, the results showed that while increased policy uncertainty induces the public to hold less money in the long run, decreased uncertainty has no long-run effects, a clear sign of asymmetric response.

scholarly journals Policy Uncertainty and the Demand for Money in Japan

2020 ◽  
Vol 12 (1) ◽  
pp. 73-87
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Majid Maki Nayeri
Keyword(s):  
Economic Policy ◽  
Money Supply ◽  
Money Demand ◽  
Policy Uncertainty ◽  
Uncertainty Measure ◽  
Demand For Money ◽  
Economic Policy Uncertainty ◽  
Nonlinear Adjustment ◽  
The Public

In an attempt to establish stability of the demand for money, some recent studies have included the volatility of the money supply and output to account for uncertainty. In this paper we consider the experience of Japan but rather than including an uncertainty measure related to money supply and output, we include a relatively more comprehensive measure known as Economic Policy Uncertainty. When we included this later measure, we were unable to find a stable money demand in Japan. However, when we introduced the nonlinear adjustment of policy uncertainty, we not only found a stable money demand but also meaningful estimates. Since the approach allows us to assess asymmetries, we found that in Japan the public hold more cash when there is an increase or a decrease in uncertainty.

Policy Uncertainty and the Demand for Money in Canada: A Nonlinear Approach

2018 ◽  
Vol 64 (4) ◽  
pp. 279-295 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Majid Maki Nayeri
Keyword(s):  
Money Demand ◽  
Policy Uncertainty ◽  
Demand For Money ◽  
The Public ◽  
Nonlinear Ardl ◽  
Nonlinear Approach ◽  
Long Run ◽  
Clear Sign ◽  
Negative Effect ◽  
Short Run

Abstract Economic uncertainty is said to affect the demand for money in either direction. We use the new comprehensive measure of policy uncertainty and assess its impact on the demand for money in Canada. When a linear model was used, we found only short-run effects of uncertainty on Canadian cash holdings. However, when a nonlinear model was used, the results revealed that increased policy uncertainty has negative effect on the demand for money in the long run but decreased uncertainty has no effect, a clear sign of an asymmetric response by the public. JEL classifications: E41 Keywords: Canada, Money Demand, Policy Uncertainty, Asymmetry, Nonlinear ARDL

ECONOMIC UNCERTAINTY, MONETARY UNCERTAINTY, AND THE DEMAND FOR MONEY IN AFRICA: AN ASYMMETRY ANALYSIS

2020 ◽  
Vol 20 (02) ◽  
pp. 2050007
Author(s):  
MOHSEN BAHMANI-OSKOOEE ◽  
AUGUSTINE C. ARIZE
Keyword(s):  
Money Demand ◽  
Region Of Interest ◽  
Output Volatility ◽  
Economic Uncertainty ◽  
Demand For Money ◽  
Asymmetric Effects ◽  
Nonlinear Ardl ◽  
Uncertainty Measures ◽  
Long Run ◽  
Short Run

Economic uncertainty and monetary uncertainty are two uncertainty measures that are said to affect the demand for money in any country and our region of interest, Africa, is no exception. In this paper, we take an additional step and argue that changes in any uncertainty measure could have asymmetric effects on the money demand. After applying the linear and nonlinear ARDL approaches to each of the 13 African nations, while we find the short-run effects of both uncertainty measures to be asymmetric, long-run asymmetric effects were discovered in limited number of countries. We also discovered that monetary volatility has more long-run effects than output volatility which implies that a steady and not so erratic money growth will have its predictive impact on the African economies.

scholarly journals Money neutrality: Rethinking the myth

2015 ◽  
Vol 62 (3) ◽  
pp. 287-320 ◽  
Author(s):  
Fakhri Issaoui ◽  
Talel Boufateh ◽  
Mourad Guesmi
Keyword(s):  
Developing Countries ◽  
Money Supply ◽  
Production Systems ◽  
Developed Countries ◽  
Subprime Crisis ◽  
Demand For Money ◽  
Long Run ◽  
The Usa ◽  
Future Demands

Considered as an axiomatic basis of classical, neoclassical, and monetarist theories, the long-run money neutrality assumption does not always seem to be verified. Indeed, in our view, the money, in the sense of M2, can constitute a long-run channel of growth transmission. Thus, this paper examines the long-term relationship among money supply (M2), income (GDP), and prices (CPI). The subprime crisis in 2007 has shown that the demand for money does not only meet motives of transaction, precaution, and speculation but also of fictional or quasi-fictional future demands due to the fact that they are created without real counterparts. The capacity of production systems in developed countries to respond to increases in money supply by creating more wealth, involves the assumption of money neutrality in the long-run. However, in developing countries, the excess of money supply may lead to inflation trends. The present study has confirmed the long-term non-neutrality of money supply in the USA, and its neutrality in Gabon and Morocco.

The Problem of Identifying and Modeling the Relationship between Monetary Factor and Inflation in the Russian Economy

2008 ◽  
pp. 61-76
Author(s):  
A. Porshakov ◽  
A. Ponomarenko
Keyword(s):  
Money Supply ◽  
Money Demand ◽  
Russian Economy ◽  
Long Run ◽  
Complex Approach ◽  
Wide Range ◽  
Long Time ◽  
The Relationship ◽  
Supply Side Factors

The role of monetary factor in generating inflationary processes in Russia has stimulated various debates in social and scientific circles for a relatively long time. The authors show that identification of the specificity of relationship between money and inflation requires a complex approach based on statistical modeling and involving a wide range of indicators relevant for the price changes in the economy. As a result a model of inflation for Russia implying the decomposition of inflation dynamics into demand-side and supply-side factors is suggested. The main conclusion drawn is that during the recent years the volume of inflationary pressures in the Russian economy has been determined by the deviation of money supply from money demand, rather than by money supply alone. At the same time, monetary factor has a long-run spread over time impact on inflation.

Oil, Rates and Inflation

2005 ◽  
pp. 4-20
Author(s):  
E. Yasin
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Raw Materials ◽  
Gdp Growth ◽  
Business Activity ◽  
Demand For Money ◽  
Percentage Points

Currency inflow in Russia from raw materials exports allows taking into account high business activity to assimilate growing money supply transforming it into economic growth. Fall in business activity as a result of pressure on business led to saturation of demand for money. This considerably increases the danger of inflation growth and requires sterilization of excess money supply including the usage of the Stabilization Fund. According to the author's estimates, corresponding losses in GDP growth will equal 1-2 percentage points per year.

ON EVALUATION OF THE ROLE OF THERMAL AND WIND FACTORS FOR A PHYSICAL MODEL OF THE WORLD OCEAN GENERAL CIRCULATION SYSTEM

2019 ◽  
Vol 47 (3) ◽  
pp. 80-91
Author(s):  
V. G. Neiman
Keyword(s):  
Physical Model ◽  
Ocean Circulation ◽  
General Circulation ◽  
World Ocean ◽  
Circulation System ◽  
The Public ◽  
The World ◽  
Almost All ◽  
Conceptual Foundations

The main content of the work consists of certain systematization and addition of longexisting, but eventually deformed and partly lost qualitative ideas about the role of thermal and wind factors that determine the physical mechanism of the World Ocean’s General Circulation System (OGCS). It is noted that the conceptual foundations of the theory of the OGCS in one form or another are contained in the works of many well-known hydrophysicists of the last century, but the aggregate, logically coherent description of the key factors determining the physical model of the OGCS in the public literature is not so easy to find. An attempt is made to clarify and concretize some general ideas about the two key blocks that form the basis of an adequate physical model of the system of oceanic water masses motion in a climatic scale. Attention is drawn to the fact that when analyzing the OGCS it is necessary to take into account not only immediate but also indirect effects of thermal and wind factors on the ocean surface. In conclusion, it is noted that, in the end, by the uneven flow of heat to the surface of the ocean can be explained the nature of both external and almost all internal factors, in one way or another contributing to the excitation of the general, or climatic, ocean circulation.

Macroeconomic Determinants of Stock Market Prices in Nepal

2020 ◽  
Vol 2 (1) ◽  
pp. 56-65
Author(s):  
Bhim Prasad Panta
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Money Supply ◽  
Developing Economies ◽  
Annual Data ◽  
Economic Variables ◽  
Market Prices ◽  
Ardl Model ◽  
Long Run

Background: Stock market plays a crucial role in the financial system of a country. It can be viewed as a channel through which resources are properly channelized. It enables the governments and industry to raise long-term capital for financing new projects. The stock markets of developing economies are likely to be sensitive to various macro-economic factors such as GDP, imports, exports, exchange rates etc., when there is high demand on financial products, as a constituent of financial market, ultimately stock market needs to develop. Many factors can be a signal to stock market participants to expect a higher or lower return when investing in stock and one of these factors are macroeconomic variables and thus, macro-economic variables tend to effect on stock market development. Objective: This study examines the linkage between stock market prices (NEPSE index) and five macro-economic variables, namely; real GDP, broad money supply, interest rate, inflation, and exchange rate using ARDL model and to explain the behavior of the Nepal Stock Exchange Index. Methods: The ECM which is delivered from ARDL model through simple linear transformation to integrate short run adjustments with long run equilibrium without losing long run information. The analysis has been done by using 25 years' annual data from 1994 to 2019. Findings: The result suggests that the fluctuation of Nepse Index in long run is strongly associated with broad money supply, interest rate, inflation, and exchange rate. Conclusion: Though Nepalese stock market is in primitive stage, broad money supply, interest rate, inflation and exchange rate are major factors affecting stock market price of Nepal. So, policies and strategies should be made and directed taking these in to consideration. Implication: The findings of research can be helpful to understand the behavior of Nepalese stock market and develop policies for market stabilization.

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