Manuscript Title:

THE EFFECT OF FINANCIAL INNOVATION ON THE STABILITY OF MONEY DEMAND: EVIDENCE FROM SUB-SAHARAN AFRICA

Author:

AIT HBIBI AMINA

DOI Number:

DOI:10.5281/zenodo.10877693

Published : 2024-03-23

About the author(s)

1. AIT HBIBI AMINA - Laboratory of Energy, Environment and Resources Economics, Faculty of Law, Economics and Social Sciences, Cadi Ayyad University-Marrakech-Morocco.

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Abstract

Since 2007, several Sub-Saharan African countries are witness to the development of mobile money (MM), which transforms the supply of financial services. This paper examines whether these mobile money affect money demand function in sub-Saharan African economies using ARDL model in panel. Our results obtained from the cointegration technique of (PESARAN and SHIN, 1999) confirm that a long-term relationship exists between M2 and its determinants: GDP, inflation, credit interest rate and inflation. In fact, our results show that mobile money influences positively and significantly the demand for money in both the strict and the broad sense. Also, the number of automatic tellers machines (ATMs) influences positively but not significantlythe demand for money in the broad sense. Therefore, the monetary authorities must integrate the transactions realized through the mobile currency and the expansion of the ATMs in the definition of the function of demand of money and for effective policy actions aimed at stabilizing economies.


Keywords

Money Demand Function, ARDL in Panel, Sub - Saharan Africa, Mobile Money, ATMs.