Elsamadisy, E. (1993). Testing Non-Nested Specifications of Money Demand for The Small Open Economy of Kuwait. The Egyptian Statistical Journal, 37(2), 275-294. doi: 10.21608/esju.1993.314844
Elsayed M. Elsamadisy. "Testing Non-Nested Specifications of Money Demand for The Small Open Economy of Kuwait". The Egyptian Statistical Journal, 37, 2, 1993, 275-294. doi: 10.21608/esju.1993.314844
Elsamadisy, E. (1993). 'Testing Non-Nested Specifications of Money Demand for The Small Open Economy of Kuwait', The Egyptian Statistical Journal, 37(2), pp. 275-294. doi: 10.21608/esju.1993.314844
Elsamadisy, E. Testing Non-Nested Specifications of Money Demand for The Small Open Economy of Kuwait. The Egyptian Statistical Journal, 1993; 37(2): 275-294. doi: 10.21608/esju.1993.314844
Testing Non-Nested Specifications of Money Demand for The Small Open Economy of Kuwait
This paper addresses empirically the issues of selecting the appropriate opportunity cost variables in the money demand function in the presence of alternative non-nested hypothesis. Adopting a conventional real partial adjustment hypothesis, the relative performance of two alternative competing specifications for the demand for narrowly defined money with domestic and foreign short-term deposits rates as alternative measures of the opportunity cost of holding money balances is compared utilizing formal significance tests of model specification in the presence of alternative non-nested hypothesis. The tests are carried out with quarterly data from the small open economy of Kuwait over the period 1983-90. The tests unequivocally discriminated in favor of a foreign interest rate specification. A brief discussion of the factors explaining our results is presented.
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