Money Demand and Inflation in Dollarized Economies: The Case of Russia

July 1, 2005

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Franziska L Ohnsorge, and Nienke Oomes. Money Demand and Inflation in Dollarized Economies: The Case of Russia, (USA: International Monetary Fund, 2005) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Money demand in dollarized economies often appears to be highly unstable, making it difficult to forecast and control inflation. In this paper, we show that a stable money demand function for Russia can be found for "effective broad money," which includes an estimate of foreign cash holdings. Moreover, we find that an excess supply of effective broad money is inflationary, while other excess money measures are not, and that effective broad money growth has the strongest and most persistent effect on short-run inflation.

Subject: Currencies, Demand for money, Inflation, Monetary aggregates, Monetary base

Keywords: Broad money, Money demand, Ruble, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/144
Stock No:

WPIEA2005144
ISBN:

9781451861631
ISSN:

1018-5941

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