Estimating the monetary multiplier model in the Libyan economy during the period 2008-2018

Abstract

The study aimed to measure the Model of Money Multiplier in the Libyan economy during the period (first quarter 2008 to fourth quarter 2018) and then use Autoregressive Distributed lags ( ARDL ) method to estimate the long-run co-integration relationships between the variables and estimated the error correction model and short-run parameters. This study used the Money Multiplier as a depended variable. whereas the independent variables are (currency in circulation ratio of demand deposits, time deposits ratio of demand deposits, reserve requirement ratio of demand deposits, excess reserve ratio of demand deposits). The study concluded that in the long term the money multiplier has a positive relationship with the time deposits ratio of demand deposits, while the ratio of currency in circulation, reserve requirement, excess reserve to demand deposits, the relationship was negative with the money multiplier in Libya during the study period.