An Application of the Box-Cox Transportation to the Money Demand in Costa Rica
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Date
1991-05
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Ohio State University. Department of Agricultural, Environmental, and Development Economics
Abstract
This paper attempts to test different functional forms for the demand for money in Costa Rica, using the Box-Cox transformation. After an analysis of different statistics and economic theory criteria, the use of the log-linear specification is recommended, the closest theoretical functional form to the general transformation found. The introduction of some dynamics into the model is recommended, in order to correct for some autocorrelation problems.