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- W2002805210 abstract "A recent paper by Poloz (1980) examined the interesting issue of simultaneity with respect to the demand for money in Canada. The purpose of his paper was twofold: (1) to demonstrate theoretically that the magnitude and direction of simultaneous equations (SE) bias in the demand-for-money equation is variable, depending upon the current economic environment; and (2) to provide empirical support for this hypothesis using recursive ordinary least squares (OLs) and instrumental variable (iv) estimation. While arguing (correctly) that different economic environments may call forth different monetary policy instruments, Poloz presumed that his model and its error structure would remain constant under the different policy regimes. Consequently, he did not consider how the endogenous and exogenous variables, and hence the model itself, might be affected. In this paper we examine the issue of simultaneity by referring to appropriate policy variables which might be considered in different exchange rate regimes, together with an analysis of the different systems of equations which might subsequently arise. We argue that the direction and magnitude of bias, where it does occur, are empirical" @default.
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- W2002805210 date "1981-08-01" @default.
- W2002805210 modified "2023-09-26" @default.
- W2002805210 title "Simultaneity and the Demand for Money in Canada: Comments and Extensions" @default.
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- W2002805210 doi "https://doi.org/10.2307/134901" @default.
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