Abstract

BARROS CAMPELLO, Esther; PATEIRO RODRIGUEZ, Carlos  and  SALCINES CRISTAL, Venancio. The (in)stability of money demand in Colombia, 2003-2020. Inv. Econ [online]. 2022, vol.81, n.319, pp.141-167.  Epub Feb 27, 2023. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2022.319.79236.

An empirical analysis is made of the evolution of M3 and its components in Colombia during the period 2003-2020. The purpose is to evaluate the stability of each of the assets that make up the aggregate M3. Unit-root and co-integration tests are used. The stationarity of the series is studied by ADF-GLS and M-type tests, as well as with tests that incorporate the possibility of structural change. In the following we implement two different methodologies to estimate the long-run relationship between M3 components and the macroeconomic determinant variables [Vector Error Correction Model (VECM) and Fully Modified Ordinary Least Squares (FMOLS)]. The results obtained allow us to affirm that the stability of the demand of the different components of M3 is maintained, in spite of different shocks that have affected the Colombian economy over these years.

Keywords : Money demand; components of M3; unit-root; co-integration.

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