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Nidhal Mgadmi, Helmi Hamdi and Houssem Rachdi
''Non-Linear Modelling of Money Demand in Tunisia: Evidence from the STAR Model''
( 2016, Vol. 36 No.4 )
Tunisia went through a turbulent 1980s and 1990s, characterized by the introduction of the IMF's Structural Adjustment Programs (SAPs) in 1986 and the modernization of the Stock Market Exchange. These changes and reforms in the monetary policy seek to control the supply of money and contribute to the achievement of price and financial stability. Over the period 1973–2013, this paper presents an empirical investigation into the stability of money demand using the Smooth Transition Autoregressive models (STAR) which is characterized by switching regimes through continuous transition functions. The instability of the money demand is explained by the fragility of the Tunisian economy to world shocks and by the implementation of the IMF's Structural Adjustment Programs.
Keywords: Stability; Money; Tunisia; STAR
JEL: F4 - Macroeconomic Aspects of International Trade and Finance: General
C5 - Econometric Modeling: General
Manuscript Received : Sep 25 2016 Manuscript Accepted : Nov 09 2016

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