Does the Money Endogeneity Theory of Post-Keynesian Economics Apply in Frontier Emerging Markets? The Case of Saudi Arabia
Year: 2011
Type: preprint
Abstract: This study analyses the importance of Saudi Arabia’s banking sector in the monetary transmission process. Data is segmented into pre and post financial crisis, and the methodology is centered in using the autoregressive distributed lag model to test for long run relationships. Findings over the whole sample testing suggest bank deposits and loans are important factors in the monetary transmission process, reinforcing the money endogeneity theory of post-Keynesian economics. However, when tested for robustness over pre and post financial crisis periods, bank deposits are the only factor to be significantly related to the repo rate in the long run in the pre and post crisis periods. Real GDP and Real Exchange rate are used as control variables to adjust for inflation and foreign shocks, and tend to have significant positive relationships only with bank deposits in the long run, when tested over the post financial crisis period.
Source: SSRN Electronic Journal
Author: Ikhlaas Gurrib
Institution: Canadian University of Dubai
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W285921185