Atlantic Economic Journal

, Volume 15, Issue 1, pp 31–41 | Cite as

Past inflation variability and the stability of the demand-for-money function in Nigeria

  • Augustine Chuck Arize


The view that the demand-for-money function is characterized by a stable relationship is subjected to four objective statistical tests. The results suggest that for the period 1961–62 through 1981–82, the demand-for-money function became unstable around 1970–71. The past variability of the rate of inflation was found to be an important variable in the money-demand function of Nigeria.


Important Variable International Economic Public Finance Stable Relationship Inflation Variability 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bijan B. Aghevli, M. S. Khan, P. R. Narvekar, and Brock K. Short, “Monetary Policy in Selected Asian Countries,”IMF Staff Papers, 26, 1979.Google Scholar
  2. S. Ajayi, “Some Empirical Evidence on the Demand for Money in Nigeria,”American Economist, Spring 1977.Google Scholar
  3. Vinod Anand, “Note on Supply of Money-Sources of Changes in Nigeria,”Indian Journal of Economics, 56, 1976.Google Scholar
  4. A. Arize and E. Lott, “A Re-examination of the Demand for Money in Nigeria,”Atlantic Economic Journal, XIII, No. 1, March 1985.Google Scholar
  5. Mario I. Blejer, “The Demand for Money and the Variability of the Rate of Inflation: Some Empirical Results,”International Economic Review, 20, 1979.Google Scholar
  6. R. L. Brown, J. Durbin, and J. M. Evans, “Techniques for Testing the Constancy of Regression Relationships Over Time,”Journal of Royal Statistical Society, B, 37.Google Scholar
  7. G. C. Chow, “Tests of Equality Between Sets of Coefficients in Two Linear Regressions,”Econometrica, 28, July 1969.Google Scholar
  8. J. Durbin, “Tests for Serial Correlation in Regression Analysis of Least-Squares Residuals,”Biometrika, 56, 1969.Google Scholar
  9. J. V. Farley, M. Hinich, and T. W. McGuire, “Some Comparisons of Tests for Multivariate Linear Time Series Models,Journal of Econometrics, 3, August 1975.Google Scholar
  10. Edgar Feige and Douglas Pearce, “Economically Rational Expectations: Are Innovations in the Rate of Inflation Independent of Innovations in the Measures of Monetary and Fiscal Policy?”Journal of Political Economy, 84, 1970.Google Scholar
  11. Damodar Gujarati, “Use of Dummy Variables in Testing for Equality Between Sets of Coefficients in Two Linear Regression: A Note,”The American Statistician, 24, No. 1, 1970.Google Scholar
  12. R. W. Hafer and Scott Hein, “Evidence on the Temporal Stability of the Demand for Money Relationship in the United States,”Federal Reserve Bank of St. Louis, 61, 1979.Google Scholar
  13. A. C. Harvey, “An Alternative Proof and Generalization of a Test for Structural Change,”The American Statistician, 30, No. 3, August 1976.Google Scholar
  14. Robert Heller and Mohsin Khan, “The Demand for Money and the Term Structure of Interest Rates,”Journal of Political Economy, 87, 1979.Google Scholar
  15. Milton Iyoha, “The Demand for Money in Nigeria,”Social and Economic Studies, 25, 1976.Google Scholar
  16. Benjamin Klein, “The Demand for Quality Adjusted Cash Balances: Price Uncertainty in the U.S. Demand for Money Function,”Journal of Political Economy, 85, August 1977.Google Scholar
  17. Mohsin, S. Khan, “The Stability of the Demand for Money Function in the United States 1901–1965,”Journal of Political Economy, November/December 1974.Google Scholar
  18. _____, “The Variability of Expectations in a Hyperinflation,”Journal of Political Economy, 85, 1977.Google Scholar
  19. Mickey Levy, “Economically Rational Expectations of High and Volatile Inflation Rates,” Unpublished manuscript, 1981(a).Google Scholar
  20. _____, “Factors Affecting Monetary Policy in an Era of Inflation,”Journal of Monetary Economics, 1981(b).Google Scholar
  21. B. P. M. McCabe and M. J. Harrison, “Testing the Constancy of Regression Relationships Over Time Using Least Squares Residuals,”Applied Statistics, 29, 1980.Google Scholar
  22. Eric Monke, “Traded and Non Traded Goods—An Empirical Test With Nigerian Data,”Journal of Development Economics, 13, 1983.Google Scholar
  23. J. B. Nuggent and C. Glezako, “A Model of Inflation and Expectations in Latin America,”Journal of Developmental Studies, 6, No. 3, September 1979.Google Scholar
  24. Olaloku Akin, “Deficit Financing in 1965–70,”Journal of Modern African Studies, 13, 1975.Google Scholar
  25. Paul Pautler, “Uncertainty in the Demand for Money During Hyperinflation,”Economic Inquiry, 19, 1981.Google Scholar
  26. Tore Schweder, “Optimal Methods to Detect Structural Shift or Outliers in Regression,”Journal of the American Statistical Association, 71, 1976.Google Scholar
  27. M. A. Shahi and I. H. Sheikh, “Inflationary Expectations and Monetary Adjustment in Nigeria: 1960–1978,”The Pakistan Development Review, 18, No. 4, 1979.Google Scholar
  28. Statistical Analysis System: Econometric and Time Series Library, North Carolina SAS Institute, 1982.Google Scholar
  29. H. Theil and A. L. Nagar, “Testing the Independence of Regression Disturbances,”Journal of American Statistical Association,” 59, 1961.Google Scholar
  30. Paul Thomas, “The Demand for Money and the Variability of the Rate of Inflation (India—1950–51 to 1977–78),”Indian Economic Journal, 29, 1981.Google Scholar

Copyright information

© Atlantic Economic Society 1987

Authors and Affiliations

  • Augustine Chuck Arize
    • 1
  1. 1.North Texas State UniversityUSA

Personalised recommendations