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Monetary Disorder And Financial Regimes: The Demand For Money In Argentina, 1900-2006

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Executive Summary

Argentina is a unique experience of protracted economic instability and monetary disorder. In the framework of a long-term view, the authors of this paper investigate the demand for narrow money in Argentina from 1900 to 2006, shedding some light on the existence of money demand equilibrium in extremely turbulent economies. The paper examines the effect of monetary regime changes by dealing with the presence of structural breaks in long-run equations. They estimate and test for regime changes through a sequential approach and they embed breaks in long-run models. A robust co-integration analysis can be hence performed in a single-equation framework.

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