IMF Staff Papers, Volume 49, No. 3

Download or read book IMF Staff Papers, Volume 49, No. 3 written by International Monetary Fund. Research Dept. and published by International Monetary Fund. This book was released on 2002-09-23 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.