Asymmetric effects of exchange rate on money demand in Nigeria: evidence from the new broad money aggregate (M3)

Udoma Johnson Afangideh, Tuwe Soro Garbobiya, Farida Bello Umar, Nuruddeen Usman (), Victor Unekwu Ocheni and Sanusi Muhammad Yakubu

African Journal of Economic and Management Studies, 2021, vol. 12, issue 3, 470-485

Abstract: Purpose - This paper is focused on determining the asymmetric effects of exchange rate on money demand function in Nigeria. Design/methodology/approach - It employs the empirical model of Baumol–Tobin. Baumol (1952), which was founded on the opportunity and transaction cost of holding money. Monetary aggregates, M1, M2 and M3, are used for the real money balances based on the nonlinear Autoregressive Distributed Lag bound testing procedure. Findings - The results indicate that the positive and negative partial sum of exchange rate changes differ in magnitude and size, supporting the hypothesis of asymmetric effects of exchange rate changes on the demand for money in Nigeria. Originality/value - This is the first paper to consider the new broad money aggregate (M3).

Keywords: Money demand; Asymmetries; Exchange rate; NARDL model; C22; E40; F31 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ajemsp:ajems-02-2021-0080

DOI: 10.1108/AJEMS-02-2021-0080

Access Statistics for this article

African Journal of Economic and Management Studies is currently edited by Prof John Kuada

More articles in African Journal of Economic and Management Studies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().