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The black market exchange rate and demand for money in sixteen developing countries

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  • Augustine Arize
  • Steven Shwiff

Abstract

Using data for a sample of 16 diverse countries, this study tests the hypothesis that it is the black market exchange rate, not the official rate, that should enter into the demand for money function of countries where there is a black market for foreign currencies. Using several cointegration methods and Hausman tests, it is shown that this hypothesis is strongly supported for most of the countries studied. Copyright International Atlantic Economic Society 1998

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  • Augustine Arize & Steven Shwiff, 1998. "The black market exchange rate and demand for money in sixteen developing countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 4(2), pages 128-143, May.
    • Handle: RePEc:kap:iaecre:v:4:y:1998:i:2:p:128-143:10.1007/bf02295485
    DOI: 10.1007/BF02295485
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    1. Bouteldja, Abdelnacer & Benamar, Abdelhak & Maliki, Samir, 2013. "The Black Market Exchange Rate and Demand for Money in Algeria," MPRA Paper 75280, University Library of Munich, Germany.

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