Investigating the relationship between income distribution and money demand in Iran مقاله

خلاصه ماشینی:

Investigating the relationship between income distribution and money demand in Iran Ahmad Jafari Samimi* Zahra Elmi** Ali Sadeghzadeh Yazdi*** Many studies have been conducted in recent decades regarding the money demand function and the variables affecting it in developed and developing countries. Additionally, in this process, in addition to the variables commonly used in previous research, an attempt has been made to investigate the results of including the Gini coefficient variable as an income distribution variable in the money demand function in Iran. Based on the existing view, several economists such as "Barro"4, "Chant"5, and "Mohammadi and Smith"6 have proceeded to estimate the money demand function by including the income distribution variable (1). "Bahmani-Oskooee and Chi WingNg"5 addressed the estimation of the long-term money demand function using the Auto-Regressive Distributed Lag (ARDL)6 model for Hong Kong. The results obtained from estimating relationship (1) indicate that the sign of the Gini coefficient (LGC), according to Leichter's view in this field—whereby money demand decreases alongside greater income distribution inequality—is theoretically incorrect, which confirms the results of previous studies in this field in Iran. The results obtained from estimating the error correction model related to the long-term equilibrium pattern using the Autoregressive Distributed Lag (ARDL) method based on the real balances of money volumes M1 and M2 are presented in the table below. (Refer to the page image) Considering the results obtained from estimating the error correction model for real balances M1 and M2, the short-term income elasticity of money demand is positive, which is consistent with economic theories.