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Title: An investigation on the transaction motivation and the speculative motivation of the demand for money in Sri Lanka
Authors: Mallikahewa, S.N.K
De Silva, Nadeeka
Keywords: Real Money Balance
Income Elasticity
Interest Elasticity
Interest Elasticity
Transaction Motivation
Speculative Motivation
Issue Date: 1-Oct-2013
Publisher: Faculty of Management and Commerce South Eastern University of Sri Lanka Oluvil # 32360 Sri Lanka
Citation: Journal of management Volume IX No. 1. pp 42-48. October 2013
Abstract: The main objective of this study is to empirically investigate the transaction (income elasticity) and speculative motivations (interest rate elasticity) of the demand for money in the Sri Lankan context and to examine its stability. The study employed the use of co-integration test over the 1977 to 2009, to estimate long run relationship between money demand and its determinants: real income and interest rate. The study found out that money demand function is stable in Sri Lanka for the sample period. The income is the most significant factor of the demand for money, and it makes a powerful positive impact on real money demand. Interest rate is positively related with real money demand and significant, but not consistent with existing theories. Demand for Money on transaction motivation is larger than its speculative motivation in the Sri Lankan context.
ISSN: 1391-8230
Appears in Collections:Volume 9. Issue 1

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