Broad Money Demand and Monetary Policy in Tunisia

Volker Treichel

No 1997/022, IMF Working Papers from International Monetary Fund

Abstract: The development of empirical foundations to the conduct of monetary policy in Tunisia is the central concern of this paper. Finding stable money demand functions, it broadly corroborates the choice of monetary aggregates as intermediate targets of monetary policy by the Tunisian Central Bank. It finds, however, a lower income elasticity than the one currently applied by the Central Bank and proposes a different methodology for defining monetary growth targets. The paper also finds that both interest rates and reserve money are feasible operating targets and suggests that the Central Bank orients its monetary policy more towards transparent operating targets.

Keywords: WP; money demand; treasury bill; inflation rate; T-bill rate; targeted monetary aggregate; monetary aggregate M2; interest rate target; money demand function; Monetary base; Demand for money; Treasury bills and bonds; Monetary aggregates; Personal income; Maghreb; Asia and Pacific (search for similar items in EconPapers)
Pages: 27
Date: 1997-03-01
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Citations: View citations in EconPapers (13)

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