The Relation Between Excess Domestic Liquidity and Balance Of Payments Disequilibrium : Evidence From EgypT | ||||
| التجارة والتمويل | ||||
| Article 19, Volume 34, Issue 2, June 2014, Page 1-14 PDF (1.02 MB) | ||||
| DOI: 10.21608/caf.2014.130127 | ||||
 View on SCiNiTO | ||||
| Author | ||||
| Ahmed fathy Alkhadrawy | ||||
| Faculty of Commerce - Damietta University | ||||
| Abstract | ||||
| This paper tests the monetary approach to Egypt’s balance of payments during the period 1980 to 2012. It examines whether excess domestic supply played a role as a disturbance. The empirical results suggest that money played a significant role in determining the balance of payments. The one-to-one negative relationship and strong link between domestic credit and the flow of international reserves is established,. The results confirm that balance of payment in Egypt is a purely monetary phenomenon. The monetary authority in the country should seriously monitor budget deficit because this also cause domestic credit increase. The policy conclusion is that, given a stable demand for money function. balance of payments disequilibrium can be corrected through appropriate financial programming and monetary targeting. | ||||
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