Aggregate demand equation | OLS | 2SLS/IV | 3SLS |
Lagged output gap | 0.5389*** (0.000) | 0.5892*** (0.000) | 0.5663*** (0.000) |
Expected output gap | 0.5135*** (0.000) | 0.4307*** (0.000) | 0.4462*** (0.001) |
Real interest rate | 0.0385 (0.900) | 0.1879 (0.608) | 0.1508 (0.675) |
Real exchange rate | −0.2278 (0.745) | 0.5549 (0.598) | 0.3651 (0.724) |
Constant | 1.0526 (0.765) | −2.7936 (0.593) | −1.8574 (0.718) |
Money demand equation |
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|
|
Real output gap | 0.0027 (0.429) | −0.0003 (0.973) | −0.0085 (0.205) |
Nominal interest rate | −0.6039*** (0.000) | −0.6120*** (0.000) | −0.6280*** (0.000) |
Nominal exchange rate | 0.8380*** (0.000) | 0.8418*** (0.000) | 0.8363*** (0.000) |
Constant | 3.9334*** (0.000) | 3.9354*** (0.000) | 3.9972*** (0.000) |
Aggregate supply equation |
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|
|
Expected inflation rate | 0.4882*** (0.000) | 0.5014*** (0.000) | 0.5255*** (0.000) |
Lagged inflation rate | 0.4957*** (0.000) | 0.5036*** (0.000) | 0.4860*** (0.000) |
Output gap (current+lagged) | −0.0003 (0.259) | 0.0001 (0.850) | 0.0002 (0.731) |
Real interest rate | −0.0372 (0.003)*** | 0.0049 (0.736) | 0.0036 (0.794) |
REER | 0.0256 (0.303) | −0.0073 (0.829) | −0.0216 (0.510) |
Real money supply | 0.0226 (0.007)*** | −0.0035 (0.707) | 0.0021 (0.817) |
Constant | 0.0883 (0.348) | 0.0483 (0.712) | 0.0589 (0.642) |
Exchange rate equation |
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|
|
Expected REER | 0.9576*** (0.000) | 0.9978*** (0.000) | 0.9884*** (0.000) |
Interest rate differential (domestic-foreign) | −0.0058 (0.360) | −0.0045 (0.489) | −0.0054 (0.393) |
Net foreign assets | −0.0004 (0.920) | −0.0013 (0.724) | −0.0012 (0.749) |
Constant | 0.2009* (0.105) | 0.0067 (0.961) | 0.0521 (0.698) |
Interest rate equation |
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|
|
Expected inflation rate | 0.0906*** (0.000) | 0.0929*** (0.000) | 0.0904*** (0.000) |
Nominal exchange rate | 0.0952*** (0.000) | 0.0925*** (0.000) | 0.0947*** (0.000) |
Bank rate | 0.9042*** (0.000) | 0.9022*** (0.000) | 0.9085*** (0.000) |
Constant | −0.1478* (0.030) | −0.1344*** (0.119) | −0.1584** (0.044) |
No of observations | 158 | 158 | 158 |
Hausman test | Ols vs 2 sls 2.45 (0.6532) | 2 sls vs 3sls 1.25 (0.8703) | Ols vs 3 sls 2.17 (0.7038) |