أثر سعر الصرف على سرعة دوران النقود في الجزائر دراسة قياسية الفترة (1970_2023)

Abstract

This study aims to analyze the relationship between the exchange rate and the velocity of money in Algeria during the period (1970-2023). The Autoregressive Distributed Lag (ARDL) model was used to measure the relationship. The velocity of money was adopted as a dependent variable, and a number of explanatory variables represented: the exchange rate, GDP per capita, inflation, domestic savings, and the trade balance. The study found a long-term relationship between these variables; the exchange rate negatively affects the velocity of money in the long term, despite its temporary positive effect in the short term. This can be explained by the decline in confidence in the national currency, and the tendency of individuals and institutions to hoard money or transfer it to other assets when the exchange rate fluctuates, which leads to a decrease in the level of cash circulation in the economy. GDP per capita also had a negative impact in the long run, while inflation had an increasing positive effect, and saving had a changing dynamic effect. The trade balance had a statistically insignificant effect. These results reflect the dynamics of macro variables in Algeria, their varying impact on liquidity and the behavior of individuals. The study highlights the importance of controlling exchange rate fluctuations. It also emphasizes the need to take into account the interaction of economic factors when formulating monetary policy.