Labour Productivity and Money Demand Behavior in Zanzibar
Keywords:
Autoregressive distributive lag, Error correction, Money demand, Labour ProductivityAbstract
This study examines the relationship between labour productivity and money demand behaviour in Zanzibar. We estimate a model with a ARDL specification and bound test for the cointegration and the long run relationship. This paper also offers support to the explanation that if policy-makers are able to conduct proper monetary policies in a timely manner, they might necessarily influence labour productivity permanently following “well-understood” policy rules as the two variable have a positive relationship. Finally, our evidence also points out that causality relationship is from labour productivity to money demand.
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