Money Demand Instability and Money Supply in Tunisia during Transition Period
Journal of World Economic Research
Volume 3, Issue 6-1, December 2014, Pages: 15-21
Received: Dec. 14, 2014; Accepted: Dec. 16, 2014; Published: Jan. 24, 2015
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Olfa Manai Daboussi, MASE- ESSAI and MACMA- TUNIS, Higher Institute of Management of Tunis, University of Tunis, Tunisia
Amira Majoul, Applied Quantitative Analysis Unit (UAQUAP) -Tunisia ISG and GATE (UMR 5824CNRS), Higher Institute of Management of Tunis, University of Tunis, Tunisia
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The objective of this paper is to present an empirical analysis of Tunisian money demand, money supply and monetary policy before and after economic transitions. This work explores the instability in estimated money demand functions. We evaluate the role of financial innovations in stabilizing the demand money function over two periods. Results suggest that the monetary aggregate has become inadequate to justify the controllability of money supply by the Tunisian Central Bank during the period of 1987 to 2013. The empirical evidence presented in the paper, provides that Tunisia to be held account of the effect of financial liberalization for adopting the inflation targeting like alternative monetary strategy.
Monetary Aggregates, Monetary Policy, Time Series, Tunisia
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Olfa Manai Daboussi, Amira Majoul, Money Demand Instability and Money Supply in Tunisia during Transition Period, Journal of World Economic Research. Special Issue: Issues and Challenges of the Financial and Economic Crisis Throughout the World. Vol. 3, No. 6-1, 2014, pp. 15-21. doi: 10.11648/j.jwer.s.2014030601.13
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