Assessing the asymmetric implications of the common monetary area on the stability of the Namibian money demand function
| dc.contributor.author | Ndana, Doughlas Mwangala | |
| dc.date.accessioned | 2023-10-26T10:16:21Z | |
| dc.date.available | 2023-10-26T10:16:21Z | |
| dc.date.issued | 2023 | |
| dc.description | A thesis submitted in partial fulfilment of the requirements for the degree of master of science in economics | en_US |
| dc.description.abstract | The anecdote of this study is broadly focused on assessing the asymmetric implications of the Common Monetary Area (CMA) on the stability of the Namibian money demand function (MDF) using a nonlinear autoregressive distributed lag (NARDL) model covering the period 2001q1 to 2021q3. It is provoked by long extant literature’s recognition that MDF stability is a prerequisite for effective and successful monetary policy implementation. Surprisingly antecedent global and Namibian research results have remained broadly divergent, with the adoption of appropriate models, particularly nonlinear models found to be sparse. A local study that investigated the nonlinear drivers of money demand failed to ascertain the stability of the Namibian MDF, hence, the present research seeks establish the asymmetric impact of the CMA on the Namibian MDF, and ascertain the stability of the function. The results reveal the existence of a long-run relationship between money demand and the South African repo rate (SA_repo), income, three-month TB rate, inflation rate, exchange rate and deposit rate. It has been further found that long-run asymmetric impacts of most variables on the Namibian MDF are incomplete. Focusing on the main thrust of the study, positive shocks in the SA_repo, a CMA proxy, have a significant asymmetric influence on MDF in the long-run. Short-run results of the model are corroborated by a negative and statistically significant error correction term indicating that 23% of short-run deviations are corrected in each quarter over the sample period. The study further show that the short-run effects of most regressors are asymmetric and that the Namibian MDF is stable. The asymmetric dynamic multiplier effects of the SA_repo on the Namibian MDF reveals that positive shocks in the variable dominate their negative counterparts with the impact more pronounced in the long-run. Therefore, as an antidote, in its monetary policy implementation, the Bank of Namibia should vigorously observe upward adjustments in the SA_repo. | en_US |
| dc.identifier.uri | http://hdl.handle.net/11070/3742 | |
| dc.language.iso | en | en_US |
| dc.publisher | University of Namibia | en_US |
| dc.subject | Money demand function stability | en_US |
| dc.subject | Namibia | en_US |
| dc.subject | Asymmetry | en_US |
| dc.subject | Nonlinear Autoregressive Distributed Lag Model | en_US |
| dc.subject | Common Monetary Area | en_US |
| dc.title | Assessing the asymmetric implications of the common monetary area on the stability of the Namibian money demand function | en_US |
| dc.type | Thesis | en_US |