How Useful is Monetary Econometrics in Low-Income Countries?: The Case of Money Demand and the Multipliers in Rwanda

23 Pages Posted: 3 Mar 2006

See all articles by David Hauner

David Hauner

International Monetary Fund (IMF) - African Department

C. Gabriel Di Bella

International Monetary Fund (IMF)

Date Written: September 2005

Abstract

This paper revisits the usefulness of econometric monetary analysis in low-income countries in a case study on Rwanda, an interesting case given its floating exchange rate and reliance on indirect monetary policy instruments on the one hand, and its somewhat typical data and institutional shortcomings on the other hand. The findings are generally encouraging for the use of econometric models for monetary analysis in low-income countries. Notwithstanding substantial qualifications, time series and structural models of the money multiplier and money demand yield results that are statistically and economically reasonable enough to usefully inform policymaking.

Keywords: Money demand, money multiplier, Rwanda

JEL Classification: E41, E51

Suggested Citation

Hauner, David and Di Bella, C. Gabriel, How Useful is Monetary Econometrics in Low-Income Countries?: The Case of Money Demand and the Multipliers in Rwanda (September 2005). IMF Working Paper, Vol. , pp. 1-23, 2005. Available at SSRN: https://ssrn.com/abstract=888047

David Hauner (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

C. Gabriel Di Bella

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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