Endogenous and Exogenous Money Concepts: An Empirical Investigation from the Kingdom of Saudi Arabia
This study examines the long run equilibrium relationship between the demand for loans and deposits in the Kingdom of Saudi Arabia (KSA) using the Cointegration technique. In addition, the study investigates both the short run dynamics and the direction of the causality in the long and short run between the demand for loans and deposits in order to test the endogeneity/ exogeneity of money supply utilizing the vector error correction model (VECM) technique and the Wu-Hausman exogeneity test. The Cointegration test indicates the existence of long run equilibrium between loans and deposits. The causality tests indicate that there is a unidirectional causal relationship from deposits to loans in the long but not in the short run. In addition, the Wu-Hausman exogeneity test indicates that the null hypothesis of exogeneity of loans and GNPin the deposits equation could not be rejected. This result indicates that money supply is not endogenous since the demand for credit does not create money. Instead, one may conclude that money supply is mostly exogenously determined under the control of the Saudi Arabian Monetary Agency (SAMA).
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 59 (2006)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: Via Garibaldi 4, 16124 Genova, Italy|
Phone: +39 010 27041
Fax: +39 010 2704222
Web page: http://www.ge.camcom.it/IT/Tool/Modulistica
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ris:ecoint:0082. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Procopio)
If references are entirely missing, you can add them using this form.