Money demand, the Cagan model and the inflation tax: some Latin American evidence

Article Abstract:

An analysis describing money demand under inflationary conditions is presented. The analysis is based on data covering Argentina, Bolivia, Brazil, Chile and Peru. The Cagan model's applicability to the monetary and inflationary experiences of these Latin American countries is tested. The test applies econometrics without any focus on expectations except stationary forecast errors. It is shown that the Cagan model explains the inflationary case for the subject countries.

Inflation (Finance), Latin America, Inflation (Economics)

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The term structure of forward exchange premiums and the forecastability of spot exchange rates: correcting the errors

Article Abstract:

Foreign exchange premiums include substantial information about ensuing movements in the spot foreign exchange rate. The empirical framework developed allowed potential deviations from rationality and the existence of risk premiums. Spot and forward exchange rates are well symbolized by a vector error correction model (VECM). It was established that the VECM is outstandingly superior to a host of alternative forecasts.

Foreign Currency Management, Usage, Econometrics, Foreign exchange, Spot market, Foreign exchange futures

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Modeling the demand for U.K. broad money: 1871-1913

Article Abstract:

An analysis describing money demand is presented. The analysis is applied to the UK for the period covering 1871-1913. Estimates of short- and long-term money demand are generated by applying broad money data, broad money determinants and econometric methods. It is shown that the procedure leads to the development of a theoretically viable long-term function and also a shrot-term dynamic demand function.

United Kingdom

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