P-star model approach of linking money and price in Thailand
Simple sum monetary aggregate is the traditional monetary aggregate that is used by central banks in the world in monetary policy. The relationship between simple sum monetary aggrega te and inflation had been proven by many past studies. However, the increasing of fi...
| Main Author: | |
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| Format: | Final Year Project Report / IMRAD |
| Language: | English |
| Published: |
Universiti Malaysia Sarawak (UNIMAS)
2009
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/6475/ http://ir.unimas.my/id/eprint/6475/4/Maggie%20Tang%20full.pdf |
| Summary: | Simple sum monetary aggregate is the traditional monetary aggregate that
is
used
by central banks in the world in monetary policy. The relationship between simple sum
monetary aggrega
te and inflation had been proven
by many past studies. However, the
increasing of financial liberalization in 1980s has blurred the relationship bet
ween money
and price.
M
any alternative monetary aggregates
have
been introduced. One of them
is
Divisia monetary aggregate.
This
study
compares the perform
ance of s
imple sum and
Divisia monetary aggregate
s
in Thailand
by using P
-
Star model
.
Using quarterl
y data
from 1993:1 to 2005:4, the result in this study
illust
rated that simple sum M2 contains
more information in predicting inflationary movement in Thailand compared to other
monetary aggregate
s
. In addition, P
-
Star model can perform well in
tracking in
flation in
Thailand. |
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