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stability of money demand function in Tunisia

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  • mhamdi, ghrissi

Abstract

The aim of this paper is to give an answer to the question that remains wide open; Is Central Bank of Tunisia, capable to transmit all the information on the evolution of prices to economic agents through targeting monetary aggregates. To answer this question, a way that focuses on the stability of the money demand function through the test of Cumulative Sum of residues (SUMCU) and Chow's Forecast test is followed. The results of this study indicate that there is no significant and important relationship between money and prices either in short term or long term. In addition, by estimating the money demand function and its long-term stability, the results show that this relationship is not stable in the case of the Tunisian economy.

Suggested Citation

  • mhamdi, ghrissi, 2013. "stability of money demand function in Tunisia," MPRA Paper 63478, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63478
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    Cited by:

    1. mhamdi, ghrissi, 2012. "Determinants of Inflation in Tunisia Using Structural Modeling," MPRA Paper 63479, University Library of Munich, Germany.
    2. Ghrissi Mhamdi & Mounir Smida & Ramzi Farhani, 2014. "Indicators of core inflation: Case of Tunisia," Post-Print halshs-01138432, HAL.
    3. Malika Neifar & Niazi Kammoun, 2022. "Revisit of Tunisia s Money Demand Function: What About Oil Price and Exchange Rate Effects?," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 106-116, September.

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    More about this item

    Keywords

    Monetary targeting; money demand function; Chow tests;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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