01975cas a2200253 a 4500 AALejournalIMF000857 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451847369 1018-5941 BD-DhAAL BD-DhAAL Khamis, May. Can Currency Demand Be Stable Under a Financial Crisis? : The Case of Mexico / May Khamis, Alfredo Leone. Washington, D.C. : International Monetary Fund, 1999. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper finds strong evidence that real currency demand in Mexico remained stable throughout and after the financial crisis in Mexico. Cointegration analysis using the Johansen-Juselius technique indicates a strong cointegration relationship between real currency balances, real private consumption expenditures, and the interest rate. The dynamic model for real currency demand exhibits significant parameter constancy even after the financial crisis as indicated by a number of statistical tests. The paper concludes that the significant reduction in real currency demand under the financial crisis in Mexico could be appropriately explained by the change in the variables that historically explained the demand for real cash balances in Mexico. This result supports the Bank of Mexico's use of a reserve money program to implement monetary policy under the financial crisis. Mode of access: Internet Leone, Alfredo. IMF Working Papers; Working Paper ; No. 1999/053 Full text available on IMF http://elibrary.imf.org/view/journals/001/1999/053/001.1999.issue-053-en.xml IMF e-Library