Financial Liberalization, Money Demand, and Inflation in Uganda
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Summary:
This paper uses cointegration analysis to investigate the empirical relationship among money, prices, income, and a vector of interest rates in Uganda from 1982 to 1998. Despite the substantial financial market liberalization that has taken place in the early 1990s, quarterly time-series data confirm that a stable relationship prevailed among real broad money, income, and domestic and foreign interest rates. The empirical results indicate income homogeneity, a strong own-rate-of-return effect, a high degree of international capital mobility and asset substitutability, and demonstrate that both domestic and foreign factors are important determinants of inflation in Uganda.
Series:
Working Paper No. 2001/118
Subject:
Demand for money Financial services Inflation Interbank rates Monetary base Money Prices Velocity of money
English
Publication Date:
August 1, 2001
ISBN/ISSN:
9781451854084/1018-5941
Stock No:
WPIEA1182001
Pages:
45
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