Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104183
Authors: 
Fidrmuc, Jarko
Year of Publication: 
2006
Series/Report no.: 
Munich Discussion Paper 2006-31
Abstract: 
A panel data set for six countries (Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia) is used to estimate money demand with panel cointegration methods over the recent disinflation period. The basic money demand model is able to convincingly explain the long-run dynamics of M2 in the selected countries. However, money demand is found to have been significantly determined by the euro area interest rates and the exchange rate against the euro, which indicates possible instability of money demand functions in the CEECs. Therefore, direct inflation targeting is an appropriate monetary regime before the eventual adoption of the euro.
Subjects: 
Money demand
panel unit root tests
panel cointegration
direct inflation targeting
CEECs
JEL: 
E41
E58
C23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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