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“Has There Been a Shift in the Greek Money Demand Function?”
Credit and Capital Markets – Kredit und Kapital, Vol. 20 (1987), Iss. 1 : pp. 106–115
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Daniel Himarios, Arlington
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Administered interest rates and the demand for money in Greece under rational expectations
Himarios, Daniel
Weltwirtschaftliches Archiv, Vol. 122 (1986), Iss. 1 P.173
https://doi.org/10.1007/BF02706293 [Citations: 4]
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Himarios, D.: “Administered Interest Rates and the Demand for Money in Greece under Rational Expectations”, Weltwirtschaftliches Archiv, Band 122, Heft], 1986.
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Himarios, D.: “Inflationary Expectations and the Demand for Money: The Greek Experience – A Comment and Some Different Results”, Kredit und Kapital, 1983/Heft 2.
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Panayotopoulos, D.: “Inflationary Expectations and the Demand for Money: The Greek Experience: ‘A Comment and Some Different Results’ – A Rejoinder”, Kredit und Kapital, 1984/Heft 2 .
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Abstract
“Has There Been a Shift in the Greek Money Demand Function?”
In a recent paper in this Journal, Panayotopoulos (1984) criticizes my 1983 paper (Himarios, 1983) on two counts. First, he questions the incorporation of adummy variable in the demand for M1 for 1967. He argues that is a dummy variable is to be included for 1967 it should also be included for 1974. Second, Panayotopoulos claims that my earlier results cannot be accepted on the grounds that the demand for M1 has been unstable and thus the data cannot be pooled. The purpose of this note is to account for these two criticisms. I argue that the introduction of a dummy variable for 1967 is justified and necessary while no such correction is necessary for 1974. On the second and more important issue, formal stability tests indicate that the demand for M1 has been statistically stable over the period 1956 – 1981. Thus, estimating a single equation is the appropiate and most efficient strategy.