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Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

Abstract

The goal of this paper is to investigate the money demand function in Jordan by employing the ‎cointegration analysis proposed by Engle and Granger, and extended by Johansen. By using ‎Johansen procedure the relative importance of each variable explaining the money demand ‎function is identified.‎ Generally it was found that all suggested variables are nonstationary. This consequently sheds ‎some doubts on previous studies based on conventional methods of estimation. Also, the ‎study found that there exists a long run relationship among money income and interest rate

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