Proceedings of the 55th International Academic Conference, Vienna

MONEY DEMAND: THE GUIDE TO MONETARY POLICY IN RUSSIA, 1997-2020

OLGA KHON

Abstract:

We estimate a short-run demand function, using the quarterly data available for modern Russian market - on the one-quarter basis for 1997-2020. Empirical results provide a stable money demand function that explains the short-run money velocity movement. The approach is based on econometric models and dynamic least square methods evaluation within the Akaike criterion applied for the authors’ choice of leads and lags. The prior innovation related to model comparison of interest rates in money demand function – from research-common money market rate to interbank market rate, amplifying proxy better-fitted for the Russian market.

Keywords: Monetary policy, money demand, money velocity, income elasticity, interest semi-elasticity

DOI: 10.20472/IAC.2020.055.009

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