Journal of Quantitative Economics

, Volume 17, Issue 1, pp 153–165 | Cite as

On the Instability of Tunisian Money Demand: Some Empirical Issues with Structural Breaks

  • Nidhal Mgadmi
  • Houssem RachdiEmail author
  • Hichem Saidi
  • Khaled Guesmi
Original Article


This paper focuses on the causes of instability of money demand in Tunisia between 1973 and 2013. It has been argued that the main explanatory factors of money demand are national income, monetary market rate and exchange rate. We tested Ambler and McKinnon hypothesis (1985), which assumes that instability is explained by the absence of the nominal exchange rate in the specification of money demand. We found that structural changes are explained by the dependence of the national economy to world shocks, the IMF’s structural adjustment programme at the end of 1986.


Money demand Structural change tests Causality tests Stability tests 

JEL Classification

E41 C5 


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Copyright information

© The Indian Econometric Society 2018

Authors and Affiliations

  • Nidhal Mgadmi
    • 1
  • Houssem Rachdi
    • 2
    Email author
  • Hichem Saidi
    • 3
  • Khaled Guesmi
    • 4
  1. 1.Faculty of Law, Economics and ManagementUniversity of JendoubaJendoubaTunisia
  2. 2.IHEC Carthage, University of Carthage TunisTunisia & IPAG Business SchoolParisFrance
  3. 3.ESC Business School of TunisUniversity of ManoubaTunisTunisia
  4. 4.Department Energy FinanceIPAG Business SchoolParisFrance

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