The relationship between monetary base and monetary aaggregates in asean - 5
he purpose of this study is attempted to inve stigate the existence of causal relationship between monetary base and monetary aggregates (M1 and M2) for ASEAN - 5 using the time series data from 1990:Q1 to 2005:Q4. This study is conducted by employing thre...
| Main Author: | |
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| Format: | Final Year Project Report / IMRAD |
| Language: | English |
| Published: |
Universiti Malaysia Sarawak, UNIMAS
2007
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/6467/ http://ir.unimas.my/id/eprint/6467/4/Ng%20Chai%20Chet%20ft.pdf |
| Summary: | he purpose of this study is attempted to inve
stigate the existence of causal
relationship between monetary base and monetary aggregates (M1 and M2) for
ASEAN
-
5 using the time series data from 1990:Q1 to 2005:Q4. This study is
conducted by employing three methods, which are Augmented Dickey
-
Fuller (19
79)
unit root test, Johansen
-
Juselius (1990) cointegration test and Granger causality test.
Only Singapore and Thailand show a significant long
-
run cointegrating vector
between monetary base and monetary variables, which are M1 and M2 respectively.
The res
t of the ASEAN
-
5 countries fail to show a long
-
run relationship between the
variables. The causality test results show that in general there is not uni
-
directional
with causality running from monetary base to monetary aggregates in ASEAN
-
5.
Thus, monetary
targeting is inappropriate used as a monetary policy in ASEAN
-
5. In
particular, policy should be designed to improve and strengthen the monetary and
financial market in order to get better controlling in money supply process. Each
ASEAN
-
5 country has to en
sure the selected intermediate target must be measurable,
controllable and predictable. |
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