Les modèles monétaires peuvent ils expliquer le comportement du taux de change en Algérie ? Can monetary models explain exchange rate behavior in Algeria?

Abstract

This paper attempts to test whether the monetary model could explain or not the behavior of the exchange rate in Algeria using data during the period 1989-2013. Applied tests demonstrated the non-stationary series which led us to apply cointégration tests to finally estimate the Error Correction Model (ECM). We concluded that monetary model was more robust in the long run than the short run, since monetary fundamentals require time to exert their influence on the Algerian exchange rate.