The Effect of Regime Shifts on the Long-Run Relationships for Swedish Money Demand

• When the possibility of an unknown structural break is allowed and it is taken into account we find a significant long-run relationship between Swedish money demand and its determinants that is not found when no break is considered. The estimated elasticities show that money demand is more responsive to its determinants in the period after the break than before. Possible underlying reasons for the occurrence of this break and its implications are explained.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

Money demand

Structural break

Cointegration

Sweden

Economics

Nationalekonomi

Humanities and Social sciences

Publication and Content Type

ref (subject category)

art (subject category)