Money Growth and Velocity with Structural Breaks: Evidence from the Philippines

  • Assad L. Baunto UP School of Economics
  • Christian Bordes University of Paris I – Sorbonne
  • Samuel Maveyraud University of Bordeaux 4
  • Philippe Rous Université de Limoges


This paper aims to test the Friedmanite proposal on the link between the velocity of money demand and money growth. We base our work on the Philippines as its monetary policy has been subject to sharp swings since the 1980s. We use a method that takes into account possible structural breaks in the velocity of money demand and a GARCH model to evaluate the variability of money growth. We apply Granger causality tests to confirm the Friedmanite hypothesis.

Author Biographies

Christian Bordes, University of Paris I – Sorbonne
Centre d'économie de la Sorbonne (CES)
Philippe Rous, Université de Limoges
Laboratoire d’Analyse et Prospective Économiques (LAPE)


Friedman hypothesis; GARCH; structural breaks