A direct test of the endogeneity of money: Implications for Gulf Cooperation Council (GCC) countries


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TAŞ B. K. O. , Togay S.

ECONOMIC MODELLING, cilt.29, sa.3, ss.577-585, 2012 (SSCI İndekslerine Giren Dergi) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 29 Konu: 3
  • Basım Tarihi: 2012
  • Doi Numarası: 10.1016/j.econmod.2011.12.015
  • Dergi Adı: ECONOMIC MODELLING
  • Sayfa Sayıları: ss.577-585

Özet

This paper contributes to the ongoing discussion about the endogeneity of money supply by empirically investigating the GCC countries. We propose and implement a direct test of money supply endogeneity that depends on econometric specification of exogeneity which has not been used in the literature before. To be able to make comparisons with previous studies, we also conducted Granger Causality tests to analyze the causality relationship between bank credit and money supply. Both of the empirical studies provide empirical evidence for the endogeneity of money supply in GCC countries. The results of the paper have many significant monetary policy implications for the upcoming monetary unification of the GCC countries. (C) 2012 Elsevier B.V. All rights reserved.