Article citationsMore>>

Gonzalez, A., Terasvirta, T. and Van Dijk, D. (2005) Panel Smooth Transition Regression Models. Working Paper Series in Economics and Finance, No. 604.

has been cited by the following article:

• TITLE: Cagan Effect and the Money Demand by Firms in China: A Nonlinear Panel Smooth Transition Approach

  AUTHORS: Fangping Peng, Kai Zhan, Yujun Lian

  KEYWORDS: Cagan Hypothesis, Panel Smooth Transition, Money Demand, Firm Level

  JOURNAL NAME: Journal of Mathematical Finance, Vol.5 No.2, May 5, 2015

  ABSTRACT: This paper examines the Cagan effect in China by using a panel smooth transition approach on the firm-level data. Our results reveal that the demand for money by firms relatively decreases for the high inflation period, because the firm anticipates further price increase that it seeks a substitute for money, supporting the presence of the Cagan effect in firms in China. A policy implication of our finding is that efficiently managing Inflation Expectation is necessary in China in stimulating the economy through expansion of the money supply.