| Popis: |
The main objective of this study is to analyze the relationship between the exchange rate and the parallel circulation of money (M1) in Algeria during the period 1980-2010. For this purpose, we use the proposed especially by Pesaran et al ARDL model. (2001). the results confirm the convergence of long-term determinants of the demand for money (income, consumption price index, interest rate deposits, the parallel exchange rate). In addition, the CUSUM test and CUSUMSQ clearly show the stability of the long-term relationship during the estimation period between the parallel exchange rate and demand for the currency in Algeria. Instead, the relationship becomes unstable once we use the official exchange rate. |
