{"id":3253,"date":"2018-07-05T10:02:40","date_gmt":"2018-07-05T08:02:40","guid":{"rendered":"http:\/\/www.rsijournal.eu\/?p=3253"},"modified":"2018-07-05T06:48:51","modified_gmt":"2018-07-05T04:48:51","slug":"investigating-the-effect-of-financial-innovations-on-the-demand-for-money-in-australia-using-dols-and-fmols-and-comparing-their-predictive-powers-2","status":"publish","type":"post","link":"https:\/\/rsijournal.eu\/?p=3253","title":{"rendered":"INVESTIGATING THE EFFECT OF FINANCIAL INNOVATIONS ON THE DEMAND FOR MONEY IN AUSTRALIA USING DOLS AND FMOLS AND COMPARING THEIR PREDICTIVE POWERS"},"content":{"rendered":"<h2>Payam MOHAMMAD ALIHA<\/h2>\n<h3>Ph.D candidate, Universiti Kebangsaan Malaysia (UKM), Malaysia<\/h3>\n<h3>payammaliha@gmail.com<\/h3>\n<h2>Tamat SARMIDI<\/h2>\n<h3>Associate   Professor Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia<\/h3>\n<h3>tamat@ukm.edu.my<\/h3>\n<h2>Fathin FAIZAH SAID<\/h2>\n<h3>Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia<\/h3>\n<h3>fatin@ukm.edu.my<\/h3>\n<p><strong>Abstract<\/strong><\/p>\n<p>In this paper we apply two different estimation methods, namely DOLS and FMOLS to estimate real demand for money in Australia with the inclusion of financial innovations. We use a conventional money demand function that was enriched with a proxy for financial innovations. This sum of the number of cheques, credit cards, charge cards, ATM and direct entry payment was included in the regression model to proxy the effect of financial innovations on the money demand. The results indicate that the estimated coefficient of TPI using DOLS is not significant yet it is highly significant using FMOLS and it bears positive sign so that 1 percent increase in TPI leads to the increase of money demand by 0.24 percent. Also, using \u201cRoot Mean Squared Error\u201d as the benchmark for predictive power, we conclude that FMOLS is superior to DOLD when it comes to forecasting.<\/p>\n<p><strong>Keywords:<\/strong> financial innovations, money demand, dynamic OLS, fully modified OLS, forecast<\/p>\n<p><strong>JEL classification: <\/strong>E41, E42, E52<br \/>\n<em><a href=\"http:\/\/www.rsijournal.eu\/ARTICLES\/July_2018\/2.pdf\" target=\"_blank\">read more<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Payam MOHAMMAD ALIHA Ph.D candidate, Universiti Kebangsaan Malaysia (UKM), Malaysia payammaliha@gmail.com Tamat SARMIDI Associate Professor Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia tamat@ukm.edu.my Fathin FAIZAH SAID Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia fatin@ukm.edu.my Abstract In this paper we apply two different estimation methods, namely&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[181],"tags":[599,596,597,598,471,601,600,395],"class_list":["post-3253","post","type-post","status-publish","format-standard","hentry","category-published","tag-dynamic-ols","tag-e41","tag-e42","tag-e52","tag-financial-innovations","tag-forecast","tag-fully-modified-ols","tag-money-demand"],"_links":{"self":[{"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/posts\/3253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3253"}],"version-history":[{"count":2,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/posts\/3253\/revisions"}],"predecessor-version":[{"id":3311,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=\/wp\/v2\/posts\/3253\/revisions\/3311"}],"wp:attachment":[{"href":"https:\/\/rsijournal.eu\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rsijournal.eu\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}