Financial liberalization and money demand in the ASEAN countries

We estimate long-run money demand equations for the ASEAN-4 countries (Indo nesia, Malaysia, Singapore, and Thailand) and evaluate whether the equation s are cointegrated. Despite the substantial financial liberalization that h as taken place in these countries, we find that the money demand equations are cointegrated. In sum, our results show that provided that the monetary authorities know the shape of these money demand equations, a policy framew ork aimed around monetary targets can be implemented. Copyright (C) 1999 Jo hn Wiley & Sons, Ltd.