چکیده:
The stability or instability of demand for money is the main determinant of condition for choosing the money supply or interest rate as de facto the leading apparatus of monetary policy. Though, it is worth to note that on theoretical ground, the demand for money can per se be affected by financial reforms propounded by the monetary authorities. In this paper, an attempt is made to investigate the impact of financial reforms in Iran on stability of demand for money viz-a-viz expounding the ex-post history of these reforms for constructing a financial reform index during the period of 1973-2012. Then, we divided the whole sample period of study into two sub periods, as pre and post periods of financial reforms de jure and subsequently, we estimated the demand for money through utilizing the Error Correction Model for the whole and two sub periods, to compare the pertinent co-efficients. The results prima facie indicate that the financial reforms, do not bear the significant effect on demand for money and the money demand function has been stable during the sample period, quid pro qua. Furthermore, we tried to examine the stability of demand for money, using the cusum and cusum of Squares Test, in which the results of these tests have confirmed the postulation that the demand for money function in Iran is stable in toto. Hence, based upon these findings, we can specify that the most appropriate paraphernalia for conduction of monetary policy in Iran is the money supply, which can falsify the ruling orthodoxy among the conventional monetary policymakers of Iran that the interest rate is more relevant and convenient tool for implementation of monetary policy in Iran ipso facto.
خلاصه ماشینی:
As was mentioned, the statistical studies conducted, whether using error correction models or in the form of CUSUM and CUSUMSQ stability testing, show that money demand has remained stable despite the financial reforms carried out.
Thus, considering the investigation of the issue in the Iranian economy and this finding that money demand has remained stable, it is necessary that money supply continues to be used as the optimal monetary policy tool by the monetary authorities.
Therefore, as presented in the theoretical foundations, based on the results of Poll (1970), if the goal is to minimize real output fluctuations, given the stability of the money demand structure even under conditions of fiscal reforms, the money supply is a more suitable tool for implementing monetary policy compared to the interest rate in the Iranian economy.
5. Model Estimation In this article, the method used to consider the effect of financial reforms on the stability of money demand is to divide the period under study into two periods based on financial development indices, one of which has experienced continuous financial development.
Using a VECM model, he concluded that although the Australian economy was accompanied by financial liberalization in the late 1980s, money demand has had a stable and long-term cointegrated relationship with output and interest rates.
For example, Nell 2 (1999), Wesso 3 (2002), Bahmani-oskooee and Rehman 4 (2005), James 5 (2005), and Narayan 6 (2007) are among these ______________________________________________________ 1.
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