Money demand in post-crisis Russia : De-dollarisation and re-monetisation
Korhonen, Iikka; Mehrotra, Aaron (29.06.2007)
Numero
14/2007Julkaisija
Bank of Finland
2007
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201408072130Tiivistelmä
Estimating money demand functions for Russia following the 1998 crisis, we find a stable money demand relationship when augmented by a deterministic trend signifying falling velocity. As predicted by theory, higher income boosts demand for real rouble balances and the income elasticity of money is close to unity. Inflation affects the adjustment towards equilibrium, while broad money shocks lead to higher inflation. We also show that exchange rate fluctuations have a considerable influence on Russian money demand. The results indicate that Russian monetary authorities have been correct in using the money stock as an information variable and that the strong influence of exchange rate on money demand is likely to continue despite de-dollarisation of the Russian economy.
Julkaisuhuomautus
Published in Emerging Markets Finance and Trade 46. (2), 2010, 5-19 and Warsaw School of Economics; Working paper Series v. 2007.