The Impact of Monetary Policy on Trade Openness

Abstract

The main objective of this study is to measure the impact of monetary policy on trade openness in a sample of MENA countries (Algeria and Saudi Arabia) during the period 1989-2018, based on the analysis of dynamic cross-sectional time series (ARDL Panel) by estimating models in the mean of the group, in the pooled mean group. and dynamic fixed effects model to investigate the relationship in the short and long term. The results of the study revealed that the pooled mean group model is the most avalable for studying the effect of monetary policy on trade openness in the selected sample, which means that the long-term estimates and error correction are homogeneous, but they vary from one country to another in the short term. The model confirmed the existence of a long-term significant effect of monetary policy on openness, while its negative impact was limited to inflation in the short term