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Housing Prices and Money Demand: Empirical Evidence in Selected MENA Countries

Author

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  • Mbazia Nadia

    (Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Tunis, Tunisia)

  • Djelassi Mouldi

    (Higher School of Economics and Business of Tunis, University of Tunis, Tunis, Tunisia)

Abstract

This paper examines the links between housing and money empirically in a money demand framework for a panel of five Middle East and North Africa (MENA) countries using quarterly data from 2007Q3 to 2014Q4 with the inclusion of house prices as a variable representing the developments in housing markets. We applied the Pool Mean Group Estimation technique to estimate the long-run and short-run dynamic relationships in money demand model. Empirical results provide the evidence that higher house prices lead to a rise in M2 demand in long-run and short-run estimations. This finding may explain the importance influence of the house price developments on monetary policy in MENA countries. The results confirm that the cross-country heterogeneity of money holdings is also connected with structural features of the housing market.

Suggested Citation

  • Mbazia Nadia & Djelassi Mouldi, 2019. "Housing Prices and Money Demand: Empirical Evidence in Selected MENA Countries," Review of Middle East Economics and Finance, De Gruyter, vol. 15(1), pages 1-18, April.
    • Handle: RePEc:bpj:rmeecf:v:15:y:2019:i:1:p:18:n:2
    DOI: 10.1515/rmeef-2017-0034
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    References listed on IDEAS

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    More about this item

    Keywords

    money demand; housing; panel data; MENA countries;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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