Modeling the demand for money at a micro level: A case of Uganda
Modeling the demand for money at a micro level: A case of Uganda
Date
2012-06
Authors
Abaliwano, Joyce
Journal Title
Journal ISSN
Volume Title
Publisher
Makerere University
Abstract
A stable demand for money function is essential for the conduct of effective monetary policy. And its estimation is crucial for policy because it has a direct role in the trading activity of the market economy hence an effect on the general price levels. This study estimates the money demand function and its stability at a micro level using a regression analysis technique. The study applies a narrow definition of measuring monetary aggregate, M1 and uses a simple sum and Divisia approaches to estimate it. Empirical results show that in both approaches, income is a significant determinant of money demand while, interest rate is not. Both approaches yield an instable money demand function and are therefore not appropriate monetary instruments on their own. Hence, monetary policy needs to be used in conjunction with other policies to achieve the goal of economic stabilization and adjustment.
Description
A Dissertation submitted to the School of Graduate Studies in partial fulfillment of the requirements for the award of the Degree of Master of Arts in Economic Policy Management of Makerere University
Keywords
Money,
Demand,
Modeling,
Micro level,
Uganda
Citation
Abaliwano, J. (2012). Modeling the demand for money at a micro level: A case of Uganda. Unpublished master's dissertation. Makerere University, Kampala, Uganda