Abstract
It is the purpose of this paper to present an empirical
analysis of the demand function for money in Pakistan. Our empirical
investigation is restricted to the period 1951-70. During this period
(a) nominal income rose at an average yearly rate of 7.0 per cent; (b)
nominal stock of money averaged a yearly increase of 7.9 or 9.7 per cent
depending on whether money is defined exclusive or inclusive of time
deposits, respectively; (c) the average rise in real income was 4.0 per
cent but it fluctuated substantially from one year to another; (d) the
yieid on long-term government bonds increased about 2.9 per cent per
year but the short-term interest rate (call money rate) advanced more
than 7.1 per cent; (e) prices were relatively stable and by any measure,
averaged a yearly increase of less than 4.0 per cent. To complete this
outline we should mention that the institutional setup affecting these
economic variables included a wide variety of controls on imports,
exports, distribution of commodi¬ties, and prices prior to 1958 and
somewhat less restrictive policies in the remainder of the period under
consideration.
Publisher
Pakistan Institute of Development Economics (PIDE)
Subject
Development,Geography, Planning and Development
Cited by
10 articles.
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