Economics, Econometrics and Finance
5 years ago

Inflation and interest rates impact money demand in Pakistan economy.

International Journal of Statistics and Reliability Engineering
An Ardl Model to Investigate the Money Demand (M2) in Pakistan
Zahid Iqbal, Waqas Mehmood

Paper Summary

The article investigates the demand for money (M2) in Pakistan using a statistical model called ARDL. The researchers found that real income and inflation have a positive impact on money demand, while interest rates have a negative effect. The exchange rate did not significantly affect money demand. The study also confirmed that the demand for money in Pakistan remained stable between 1960-2018.

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