Do Exchange Rate Changes Have Asymmetric or Symmetric Effects on the Demand for Money in the Gambia

Abstract

In trying to explain the relationship between exchange rate and demand for money researchers have applied different models. In this paper, we applied both the linear and nonlinear ARDL to check the effects of exchange rate changes on the demand for money (M1 and M2) in The Gambia. The result revealed that the demand for money is cointegrated with its determinants and have a stable short-run relationship. It also revealed that exchange rate changes have only short-run asymmetric effects on demand for money (M1 or M2) but don’t have long-run effects.

Money Demand Balances and Exchange Rate Policy in Pakistan: An ARDL and Non-ARDL Analysis

“…This section illustrates the review of literature on the relationship between exchange rate and demand for money in Pakistan and rest of the world. Bah et al (2019) pointed out that dollar appreciation had long lasting impact than the dollar depreciation. Study also determined that exchange rate had short-run impact on the demand for money rather than long run in Gambia.…”