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- Title
On the (Ir)Relevance of Monetary Aggregate Targeting in Pakistan: An Eclectic View.
- Authors
Haider, Adnan; Jan, Asad; Hyder, Kalim
- Abstract
This study attempts to identify a stable money demand function for Pakistan's economy, where the monetary aggregate is considered the nominal anchor. With evolving financial innovations and regulations, the stability of money demand has been the focus of numerous debates. Where earlier studies have provided conflicting explanations due to inadequate specifications and imprecise estimations, we find that money demand in Pakistan is stable, if specified properly. For developing countries such as Pakistan, it is important to target monetary aggregates or respond to deviations from the desirable path if monetary policy is to be effectively implemented and communicated; this should remain, if not a primary, then an auxiliary target in the monetary policy framework.
- Subjects
PAKISTAN; DEMAND for money; MONETARY policy; DEVELOPING countries; MONEY supply
- Publication
Lahore Journal of Economics, 2013, Vol 18, Issue 2, p65
- ISSN
1811-5438
- Publication type
Article