Exogenous or endogenous money supply: Evidence from Australia

Zatul E. Badarudin; Ahmed M. Khalid; Mohamed Ariff

doi:10.1142/S0217590812500257

Exogenous or endogenous money supply: Evidence from Australia

Zatul E. Badarudin^*, Ahmed M. Khalid, Mohamed Ariff

^*Corresponding author for this work

Bond Business School

Research output: Contribution to journal › Article › Research › peer-review

7 Citations (Scopus)

Abstract

This paper investigates the nature of money supply in Australia over two separate monetary policy regimes: monetary and inflation targeting. The post-Keynesian theory on endogenous money was tested with the aim of investigating whether endogenous money supply, if it did exist, followed the accomodationist, structuralist or liquidity preference viewpoints. Data used are quarterly series from 1977 to 2007 and we used vector error-correction model for long-run and short-run causality tests. We found that money supply is endogenous in Australia even when the central bank targeted monetary aggregates during the period 1977 to 1993.

Original language	English
Article number	1250025
Journal	Singapore Economic Review
Volume	57
Issue number	4
DOIs	https://doi.org/10.1142/S0217590812500257
Publication status	Published - Dec 2012

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Exogenous or endogenous money supply: Evidence from Australia

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