Using P-Star model to linking money and prices in a financial liberalised developing economy: the case for Malaysia
The P-Star approach of modelling inflation proposed by Hallman el al. has been widely tested in the United States and other developed countries. The applicability of the P-Star model for the developing countries is yet to be determined. The main purpose of the present study is to add to the current...
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| Format: | Article |
| Language: | English |
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Penerbit Universiti Kebangsaan Malaysia
1999
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| Online Access: | http://psasir.upm.edu.my/id/eprint/22541/1/Using%20P-Star%20model%20to%20linking%20money%20and%20prices%20in%20a%20financial%20liberalised%20developing%20economy%20the%20case%20for%20Malaysia.pdf |
| Summary: | The P-Star approach of modelling inflation proposed by Hallman el al. has been widely tested in the United States and other developed countries. The applicability of the P-Star model for the developing countries is yet to be determined. The main purpose of the present study is to add to the current literature on the robustness of the P-Star model with respect to a developing country - Malaysia. Using a sample period from 1981: 1 to 1994:4, our results suggest that Malaysian monetary data support the P-Star model. We conclude that there is a close relationship between money and the price level in Malaysia despite the occurrences of financial liberalisation in the 1980s and 1990s. |
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