The determinants of the behaviour of the income velocity of money in Portugal 1...

• Author(s): Nunes, Ana Bela ; St. Aubyn, Miguel ; Valério, Nuno ; Sousa, Rita Martins de
• Date: 2011
• Persistent ID: http://hdl.handle.net/10400.5/2872
• Origin: Repositório da UTL
• Subject(s): Velocity of money; Portugal; Cointegration; Institutional determinants
• Document Type: Other
• Language: English

Description

This paper performs a long-run time series analysis of the behaviour of the income velocity of money in Portugal 1891-1998, and assesses the importance of both macroeconomic and institutional factors in shaping its path. We look for particularities of the Portuguese case in the international context. By means of a cointegrated vector autoregression, we find that institutional variables matter. Moreover, regression analysis shows that the general U-shaped pattern is displayed with the inflection point located in 1973, in line with the Spanish case.