An Analytical Study of the Demand for Money in Saudi Arabia

摘要: Empirical studies on the demand for money have been object of great attention by economists due to its central role in conducting monetary policy making it possible authorities effect desired and predictable changes targeted macroeconomic variables such as income, interest rate prices appropriate aggregates. The present study sought investigate cointegrating property Saudi Arabia using annual data period 1987-2009 applying vector error correction model (VECM) technique. Findings indicate clearly existence a long run cointegration relationship between (M 2 ) explanatory variables, namely real GDP, rate, exchange inflation rate. coefficient was found be statistically significant carries minus sign expected. deviation from value would corrected about year nine monthes.