Broad Money Demand in Mauritius with Implications for Monetary Policy

This paper employs ECM approach to investigate the long run and short-run components of the broad money demand function in Mauritius for the period spanning from 2000 to 2009. To the author’s best knowledge, no study has been undertaken over broad money in Mauritius since 1992, with an update being long overdue. Results show that M2 is positively elastic with respect to GDP, with the elasticity coefficient revolving around 2.80%, clearly showing that Mauritius is not endowed with a fully developed financial system with monetization moving faster than output. The low adjustment coefficient for VECM furthers substantiates the fact that there is indeed a lack of alternative assets to M2 and above all fully justifies the transition from monetary targeting to interest rate targeting. Evidence is found in favor of foreign asset substitution but only through the exchange rate channel. Findings further show that the local stock market does not act as a substitute to local money holdings. Overall, the study points out a rather stable demand for money function in Mauritius so that the monetary authority can contemplate using it as a complementary tool but chiefly for long-run policy assessments

Modelling Non-Renewable Energy in Mauritius: In Quest for Sustainable Policies towards a Greener Economy

This paper sheds light on the interaction between energy consumption and energy production in an upper-income developing country. Results show that Industrial consumption of energy in Mauritius is driven mainly by Fuel source while Commercial use is accommodated by a mixture of Coal and Fuel sources. Bagasse and Hydro energy generations undermine the use of Coal and Fuel, all demonstrating an inherent greening phenomenon embedded in the energy process. However, their size effects are low. Findings further confirm sustainability in energy generation and absorption based on a slightly above one long-term elasticity coefficient between energy production and consumption. Overall, results suggest that Mauritius has to implement vigorous measures in view of greening its energy processes. Policy wise, this could signify the urgent need of both Commercial and Industrial usage taxes to stimulate a greener economy. Keywords: VAR; Mauritius; Sustainable/Green Policies; Variance Decomposition; Impulse Response; Energy Policies JEL Classifications: Q

Applied structural equation modelling for researchers and practitioners: using R and Stata for behavioural research

This book explains in a rigorous, concise and practical manner all the vital components embedded in structural equation modelling. Focusing on R and stata to implement and perform various structural equation models