Title

Exogenous or endogenous money supply: Evidence from Australia

Date of this Version

12-1-2012

Document Type

Journal Article

Publication Details

Published version

Badarudin, Z.t., Khalid, A.M., & Ariff, M. (2012). Exogenous or endogenous money supply: Evidence from Australia. The Singapore Economic Review, 57(4), 1250025 (12 pages). ISSN: 0217-5908

Access the journal

© Copyright World Scientific Publishing Company, 2012

ISSN

0217-5908

Abstract

This paper investigates the nature of money supply in Australia over two separate monetary policy regimes: monetary and inflation targeting. The post-Keynesian theory on endogenous money was tested with the aim of investigating whether endogenous money supply, if it did exist, followed the accomodationist, structuralist or liquidity preference viewpoints. Data used are quarterly series from 1977 to 2007 and we used vector error-correction model for long-run and short-run causality tests. We found that money supply is endogenous in Australia even when the central bank targeted monetary aggregates during the period 1977 to 1993.

 

This document has been peer reviewed.