Many of the previous studies that tried to assess the contractionary or expansionary effects of depreciations or devaluations in less developed countries (LDCs) used official exchange rate data and concluded that devaluations are contractionary in LDCs. However, due to capital controls, there is...

Testing purchasing power parity (PPP) in the black market has increased in recent years due to the apparent puzzle in the literature by which PPP is largely rejected in flexible exchange rate regimes. Many studies of PPP suffer from the problem of imposing symmetry and proportionality...

Mundell's conjecture in 1963 that the demand for money could depend on the exchange rate in addition to income and interest rate has received some attention in the literature by including the official exchange rate and estimating the money demand in a few developed countries. In less developed...

Previous research that investigated the relationship between the black market and the official exchange rate employed cointegration analysis to establish the long-run relationship and Granger causality to detect the short-run causality between the two rates (for a small number of countries). In...