The open-economy money demand asserts that for its underlying theory to hold, the variables ought to be co-integrated. Co-integrated variables although nonstationary in level, can share a long-term trend that is indeed stationary. However, the open money demand model has mainly been tested in developed and developing nations. This article investigates the co-integrated open-economy money demand in the Gambia where the macro economy is a quasi-monetary system, small (relative to the world market), but very open with a floating exchange rate regime. In the co-integrated space, the Gambian money demand appears to be quite responsive to domestic income, a measure of interest rate and the real exchange rate fluctuations.
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Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 40 (2008) Issue (Month): 6 () Pages: 731-734 Download reference. The following formats are available: HTML,
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