International Conference on Eurasian Economies
11-13 June 2019 – Famagusta, Turkish Republic of Northern Cyprus
Paper properties
Paper ID : 2301
Status : Paper published
Language : English
Topic : Finance and Financial Crises
Presenter: Prof. Dr. Trajko Slaveski
Session : 3A Finance
The Long-Run and Short-Run Endogeneity of Money Supply in the Republic of Macedonia: An Empirical Analysis
The Long-Run and Short-Run Endogeneity of Money Supply in the Republic of Macedonia: An Empirical Analysis
- Ph.D. candidate Milica Milosheska Gavrovska (Komercijalna Banka AD Skopje, Macedonia)
- Prof. Dr. Trajko Slaveski (Ss. Cyril and Methodius University, Macedonia)
Abstract
The aim of this paper is to assess the endogenous and exogenous approaches on the money creation process on empirical grounds, through analysis in the case of the Republic of Macedonia. Using the ARDL econometric model, it has been determined that the money supply in the Republic of Macedonia in the period January 2003 - August 2018 is endogenously determined in the long run. The empirical results in the short term show bidirectional causality between deposits and monetary base, as well as between deposits and loans. However, in the end, the central bank in the Republic of Macedonia has an influence on the money supply. The exogenous monetary policies based on money supply control, can positively influence the amount of liquidity held by commercial banks and, hence, increase the supply of loans, but the demand for loans is still important when stimulating the entry of liquidity in the real economy.
JEL codes:
Milosheska Gavrovska, Milica, Slaveski, Trajko (2019). "The Long-Run and Short-Run Endogeneity of Money Supply in the Republic of Macedonia: An Empirical Analysis" in Proceedings of International Conference of Eurasian Economies 2019, pp.71-83, Famagusta, Turkish Republic of Northern Cyprus.
DOI: https://doi.org/10.36880/C11.02301
