by Payam Mohammad Aliha*, Tamat Sarmidi, Fathin Faizah Said |
Universiti Kebangsaan Malaysia, Malaysia |
Abstract : The banking system has experienced rapid and significant technological changes in recent years that is the subject of this paper; however, the individual effect of most of these innovations has not been estimated. The demand for money is a very important for the conduct of monetary policy and measurement of the effectiveness of monetary policy. This study attempts to investigate if financial innovations has impacted the demand for money using a system (the original equation and the transformed one) GMM method. In this paper, money demand dynamics are examined empirically by using the Blundell–Bond estimator which reinforces Arellano–Bond by making an additional assumption that first differences of instrument variables are uncorrelated with the fixed effects. It makes it possible to introduce more instruments that improve the efficiency considerably. We estimate the demand for money (M2) for a panel of 17 countries from 2006 to 2015. The results indicate that financial instruments (proxied by credit transfers, direct debits and cheques) have positive yet small impacts on the demand for real money. |
Keywords: System, payment system, electronic, influence, acceptance |
Updated:: 22/02/2022 [syazmer]
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