The Black Market Exchange Rate and Demand for Money in Algeria

Abdelnacer Bouteldja, Abdelhak Benamar and Samir Baha-Eddine Maliki ()

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this paper is to examine empirically the effects of black market exchange rate on the demand for money in Algeria where due to government restrictions and controls on foreign exchange, two exchange rates (official and black) coexist and operate simultaneously. The discrepancy between the two rates has intensified since the adoption of the (S.A.P) in 1994.Using quarterly data for the 1974-2005 and an ARDL approach combined with CUSUM and CUSUMSQ,our results provide further evidence in favor to the inclusion of black market exchange rate rather than official rate issue.

Keywords: Money demand; Black market exchange rate; ARDL Bounds testing approach (search for similar items in EconPapers)
JEL-codes: E0 G0 (search for similar items in EconPapers)
Date: 2013-11
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Citations: View citations in EconPapers (5)

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