Dr Azar is Full Professor, Faculty of Business Administration and Economics, Haigazian University, Beirut, Lebanon. The views expressed in this note are his and do not necessarily reflect the views of BLOMINVEST Bank.
The purpose of this note is to share with the reader an empirical estimate of the money demand function for Lebanon with its parameters and arguments, using current econometric procedures. The analysis will consist mainly of presenting narrative economic interpretations, while relegating the statistical and technical part to an appendix, which could be referred to at will. And the experience is undertaken for the first two decades of the current century on a monthly frequency. The period coincides in time with the policy, pursued by the central bank of Lebanon, of targeting the Lebanese foreign exchange rate, mostly against the US dollar, by anchoring the Lebanese pound to the dollar at the rate of LBP 1,507.50. During that time, the Lebanese financial and real markets were characterized by a freedom to trade, liberty to transact, currency convertibility, moderate inflation, open foreign sector, and a relative political stability, among other good prospects, despite troublesome public finances.
For the Full report:
Spotlight – Money Demand and Monetary Policy in Lebanon