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The Black Market Exchange Rate and Demand for Money in Algeria

Bouteldja, Abdelnacer and Benamar, Abdelhak and Maliki, Samir (2013): The Black Market Exchange Rate and Demand for Money in Algeria. Published in: International Journal of Arts and Commerce , Vol. 2, (November 2013): pp. 71-82.

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Abstract

The aim of this paper is to examine empirically the effects of black market exchange rate on the demand for money in Algeria where due to government restrictions and controls on foreign exchange, two exchange rates (official and black) coexist and operate simultaneously. The discrepancy between the two rates has intensified since the adoption of the (S.A.P) in 1994.Using quarterly data for the 1974-2005 and an ARDL approach combined with CUSUM and CUSUMSQ,our results provide further evidence in favor to the inclusion of black market exchange rate rather than official rate issue.

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