| Author(s) | Ali Othman AI-Hakami |
| Affiliation | Associate Professor, Department of Economics, College of Administrative Sciences, King Saud University |
| Title | |
| Source | Journal of King Saud University. Administrative Sciences. Volume 18, No 2. (2006/1426) |
| Abstract | The Main objective of the study is to analyze the causal relationship between the quantity of money and gross domestic product in Saudi Arabia 1966-1999. To achieve the aim of this study, the cointegration and error-correction models are applied in the study. The statistical results show that the time series of variables are non-stationary in levels and first-difference stationary. The cointegration test suggests that the time series of variables are cointegrated and achieve an equilibrium in the long run. The error¬-correction model results suggest that the output is determined by the the money supply, which is consistent with monetary theory, Therefore, the quantity of money can be used as a policy instrument to affect real vairables. |
