Money supply behaviour in emerging economies: A comparative analysis

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

Research output: Contribution to journalArticleResearchpeer-review

9 Citations (Scopus)


This paper reports newevidence consistent with the post-Keynesian hypothesis of money endogeneity for hitherto unexplored 10 emerging economies. These results were obtained using a vector error correction model to test for long-run and short-run causalities with data from 1996 to 2007. The evidence suggests that money supply is endogenous in five countries, namely China, the Czech Republic, India, Malaysia and Turkey; it is exogenous in Mexico, while there was no causality found in Indonesia, Russia and Taiwan. Thailand showed endogeneity in the long-run causality. Some suggestions are made to explain the mixed results, and we also discuss the limitations arising from our narrow specifications of the money supply and the models.

Original languageEnglish
Pages (from-to)331-350
Number of pages20
JournalJournal of the Asia Pacific Economy
Issue number4
Publication statusPublished - 2009


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