The paper examines the relationship of South African broad money (M3) and a set of variables such as income, opportunity cost of holding money (domestic and foreign interest rates), inflation, and stock market prices using a shopping-time technology model from [1] and [49]. The empirical evidence employs an ARDL model to test for a stable long-run relationship between M3 and its determinants. With cointegration established, we estimate an error-correction model that reveals how short-run dynamics adjust towards a long-run equilibrium.
