De-monetisation, inflation and coffee: The demand for money in Uganda

This paper investigates the recent macroeconomic history of Uganda using time series models for the demand for the three main monetary aggregates. A collapse of income and high inflation led to de-monetisation. The flight from currency and demand deposits was limited by their use for transactions, but demand for time and savings deposits was largely a function of inflation. The role of the exchange rate and the price of coffee in determining an asset demand for money was mixed. Re-monetisation since the late 1980s has been slower than de-monetisation.