Money and inflation in Malaysia: an analysis of causality (1970-92)
This paper investigates the causal relationship between money supply and rate of inflation using Malaysian data for the period 1970-92. The Granger methodology was adopted and results generally indicate a bidirectional relationship between money supply and the rate of inflation. In specific, money s...
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| Main Authors: | , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Universiti Putra Malaysia
1994
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| Online Access: | http://psasir.upm.edu.my/id/eprint/47454/1/Money%20and%20inflation%20in%20Malaysia%20an%20analysis%20of%20causality%20%281970-92%29.pdf http://psasir.upm.edu.my/id/eprint/47454/ |
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| Summary: | This paper investigates the causal relationship between money supply and rate of inflation using Malaysian data for the period 1970-92. The Granger methodology was adopted and results generally indicate a bidirectional relationship between money supply and the rate of inflation. In specific, money supply causes inflation for all cases (MI, M2 and the various choices of lag-lengths of the independent variable) while inflation causes money supply for all cases except for M₂ at lag 12 and M1 at lag 8 for the equal lag-length analysis.
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