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Economic Uncertainty, Monetary Uncertainty, And The Demand For Money In Africa: An Asymmetry Analysis

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  • MOHSEN BAHMANI-OSKOOEE

    (Department of Economics, College of Letters & Science, University of Wisconsin-Milwaukee, P. O. Box 413, Milwaukee, WI 53201, USA2Center for Research on International Economics, College of Letters & Science, University of Wisconsin-Milwaukee, P. O. Box 413, Milwaukee, WI 53201, USA)

  • AUGUSTINE C. ARIZE

    (Department of Economics & Finance, College of Business Texas A&M University — Commerce, Commerce, TX 75429, USA)

Abstract

Economic uncertainty and monetary uncertainty are two uncertainty measures that are said to affect the demand for money in any country and our region of interest, Africa, is no exception. In this paper, we take an additional step and argue that changes in any uncertainty measure could have asymmetric effects on the money demand. After applying the linear and nonlinear ARDL approaches to each of the 13 African nations, while we find the short-run effects of both uncertainty measures to be asymmetric, long-run asymmetric effects were discovered in limited number of countries. We also discovered that monetary volatility has more long-run effects than output volatility which implies that a steady and not so erratic money growth will have its predictive impact on the African economies.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Augustine C. Arize, 2020. "Economic Uncertainty, Monetary Uncertainty, And The Demand For Money In Africa: An Asymmetry Analysis," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-24, June.
    • Handle: RePEc:wsi:gejxxx:v:20:y:2020:i:02:n:s2194565920500074
    DOI: 10.1142/S2194565920500074
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    Cited by:

    1. Chelghoum, Amirouche & Boumimez, Fayçal & Alsamara, Mouyad, 2023. "Asymmetric effects of oil price shocks on the demand for money in Algeria," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 1-11.

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