The Determinants of Money Demand Function in ASEAN-5 Countries
This paper aims to investigate the determinant of money demand function for ASEAN-5 countries over the period from 1987-2014. Macroeconomic data of these countries from World Bank Data Stream were obtained for the period between 1987 until 2014 was collected and analyzed using panel data regression analysis. Money demand function model is designed and tested using Stata 13. The results obtained showed that all the independent variables except stock price are determinants of money demand function in ASEAN-5 excluding time-invariant variables. This current study provides empirical results regarding the relationships between money demand function and its determinants in ASEAN 5 countries from 1987-2014. The finding of this study provides useful insights for policy makers; it could be used by the central bank of ASEAN 5 Countries as a guide for effective monetary policy. Even though the findings are fairly significant with a stable money demand in the five ASEAN 5 countries, they have some limitations. Other scholars should look at the other methods of analysis in determining the money demand functions in the region.
