Table 10

Ukraine: Nonlinear Relationship Between Real Balances and the Inflation Tax
(1Q:1992 - 3Q:1996)

Dependent Variable Regression Coefficients
M2 Inflation Tax Enterprise Inflation Tax
Including ConstantThrough Origin Including ConstantThrough Origin
Independent VariablesBeta Std. Beta BetaStd. BetaBetaStd. Beta BetaStd. Beta
Real Balances4.6502.6663.5012.254 1.8581.9102.5741.824
(3.175)**(3.452)** (4.278)**(3.193)**
Real Balances - Squared-.033-2.271 -.025-1.545-.016-1.123 -.032 -1.275
(-2.700)*(-2.543)* (-2.512)*(-2.403)*
DMB Deposit Interest Rate.0036.005 -.093-.156.049.206 .020.064
(.023)(-.751) (1.471)(.319)
Constant-37.610 -12.181
R-squared.479 .683 .754 .649
F-statistic4.288 10.76514.332 9.264
Significance of F(.024)* (.001)**(.000)**(.001)**

Notes: