The Monetary Approch to Balance of Payments and Exchange Rate Equilibrium Determination with an Empirical Application to the Case of Algeria
- Lakhdar Adouka
- Yahia Boucheta
- Abderahmmane Chenini
- Abdennour Belmimoune
- Mohamed Kerbouche
Abstract
The aim of this paper is to explain the exchange rate by using the fundamental determinants of cointegration techniques to search if there is a long-term relationship between exchange rate and fundamentals of the Algerian economy. For this purpose we applied the model of the monetary approach of the balance of payments to the Algerian economy. We based in this study in Edward model That’s takes into account all external factors (terms of trade, external debt ...) and internal factors (government expenditure, budget deficit, money supply ...) for the determination of real exchange rate equilibrium, and we takes in consideration two variables, domestic credit, and international reserve, as they are the most important in monetary approach to balance of payments. The results of our study are summarized in the following point: The variable international reserve has a positive sign (the expected sign is positive) that allowed us to conclude that an increase in international reserve unit will result in an appreciation of the exchange rate of 9.60*10-12 %. The domestic credit has a positive influence on real exchange rate (the expected sign is negative), that allowed us to conclude that an increase in domestic credit unit will result in an appreciation of the exchange rate of 9.41*10-10 %. This result contradicts in the economy theory.- Full Text: PDF
- DOI:10.5539/ibr.v6n4p114
This work is licensed under a Creative Commons Attribution 4.0 License.
Journal Metrics
h-index (January 2024): 102
i10-index (January 2024): 947
h5-index (January 2024): N/A
h5-median(January 2024): N/A
( The data was calculated based on Google Scholar Citations. Click Here to Learn More. )
Index
- Academic Journals Database
- ACNP
- ANVUR (Italian National Agency for the Evaluation of Universities and Research Institutes)
- CNKI Scholar
- COPAC
- CrossRef
- EBSCOhost
- EconBiz
- ECONIS
- EconPapers
- Elektronische Zeitschriftenbibliothek (EZB)
- EuroPub Database
- Excellence in Research for Australia (ERA)
- Genamics JournalSeek
- Google Scholar
- Harvard Library
- IBZ Online
- IDEAS
- Infotrieve
- Kobson
- LOCKSS
- Mendeley
- MIAR
- Norwegian Centre for Research Data (NSD)
- PKP Open Archives Harvester
- Publons
- Qualis/CAPES
- RePEc
- ResearchGate
- ROAD
- Scilit
- SHERPA/RoMEO
- SocioRePEc
- Technische Informationsbibliothek (TIB)
- The Keepers Registry
- UCR Library
- Universe Digital Library
- ZBW-German National Library of Economics
- Zeitschriften Daten Bank (ZDB)
Contact
- Kevin DuranEditorial Assistant
- ibr@ccsenet.org