Currency substitution in selected African countries - Emerald

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Currency substitution 635 Figure 7. Impulse response functions – Tunisia real money demand in Zambia allows authorities to have an independent monetary policy. Impulse response functions in Figure 8 shows that the responses of real money demand to real output, deposit rate and expected change in exchange rate shocks are completely negligible. Only innovations in domestic inflationary expectations generate a negative response of real money until the 10th quarter and dye out afterwards in the long run. Also, disturbances in real money demand generate at first the most
JES 36,6 636 Figure 8. Impulse response functions – Zambia significant response in real money demand but it sharply declines throughout the long run. The VDF confirms that domestic factors, namely the domestic inflationary expectations and domestic interest rates are the driving force behind fluctuations in real money demand. They both account for about 45 percent of variations in real money demand, while real money itself accounts for 50 percent. When we use the US dollar as anchor currency we still find that there is no currency substitution between the kwacha and the US dollar.
Page 1 and 2: The current issue and full text arc
Page 3 and 4: JES 36,6 618 with weaker trade ties
Page 5 and 6: JES 36,6 620 3. Model specification
Page 7 and 8: JES 36,6 622 The expected change in
Page 9 and 10: JES 36,6 624 Johansen and Juselius
Page 11 and 12: JES 36,6 626 Table IV. Variance dec
Page 13 and 14: JES 36,6 628 Figure 2. Impulse resp
Page 15 and 16: JES 36,6 630 40th quarter. Our vari
Page 17 and 18: JES 36,6 632 Figure 5. Impulse resp
Page 19: JES 36,6 634 expected change in exc
Page 23 and 24: JES 36,6 638 10. The LR statistics
Page 25: JES 36,6 640 Sharma, S.C., Chaisris

Currency substitution in selected African countries - Emerald

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