ISSN 1842-4562
Member of DOAJ

Money Demand in Romanian Economy, Using Multiple Regression Method and Unrestricted VAR Model



money demand, unrestricted VAR model, Romania


The paper describes the money demand in Romanian economy using two econometrics models. The first model consist in a multiple regression between demand money, monthly inflation rate, Industrial production Index and the foreign exchange rate RON/Euro. The second model (Unrestricted Vector AutoRegressive model) is applied for the same variables used in the first model. Identifying a statistically strong model, capable of stable estimations for the money demand function in Romania’s economy constitutes a prerequisite to the application of an efficient monetary policy.