Economic Strategy

Economic Strategy

Effective factors in money demand despite the variables of government debts and foreign assets of Central Bank and its stability in Iran

Document Type : Original Article

Authors
salar ghorbani 1
mohsen papri zarei 2
asghar nemati 3
mahmood eisavi 4
1 PhD in Health Economics, Center for Management Sciences and Health Economics, Iran University of Medical Sciences and Health Services, Tehran, Iran.
2 Ph.D. student of management, Islamic Azad University, Tehran, Iran.
3 Master of Public Administration (Human Resources), Islamic Azad University, Tehran Branch, Tehran, Iran
4 associate professor, department of islamic sconomics , university of allameh tabatabai
10.22034/es.2024.433175.1730
Abstract
Correct strategies in the field of monetary policies are realized and hit the target point when the policy maker has a comprehensive and complete understanding of the money demand function. Demand for money also plays an important role in economic decision making. The purpose of the research is to investigate the most important factors affecting money demand in Iran for the period of 1357-1400 using the ARDL method and measuring its stability using the CUSUM method. Interest rate, national production, exchange rate and inflation have been the most important variables used in domestic researches, which are used to measure the money demand function. In this research, in order to create a distinction with other similar domestic research, by using the study of people like Jindal, in addition to the mentioned variables, variables such as the foreign assets of the central bank and government debts were entered into the model. The results of the ARDL method showed that the variables of government debt, national production, inflation, foreign reserves of the central bank and exchange rate have a significant and positive effect on the demand for Iranian money, and the interest rate has a negative and significant effect on the demand for Iranian money. The stability of the money demand function was confirmed using the CUSUM method
Keywords
Money Demand
Government Debt
Central Bank foreign assets
CUSUM test

Subjects

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  • Receive Date 31 December 2023
  • Revise Date 08 May 2024
  • Accept Date 25 May 2024