Purpose – Since the last review article by McKenzie, the literature has experienced a surge in the number of empirical articles. These new contributions, coupled with those that were overlooked by McKenzie, set the stage for this review. Many of the recent studies have been empirical in nature...

Purpose – Studies that have addressed the stability of the demand for money in African countries are rare. A few papers have addressed the issue in a small number of individual countries. For cross‐country comparison, this paper aims to investigate the stability of the M2 demand for money in...

Purpose – Since the introduction of the concepts of the J‐ and S‐curves, many researchers have tried to verify their validity empirically. This paper aims to review the related papers and to offer direction for future research. Design/methodology/approach – This is a review paper. As...

Attempts to shed new light on the relation between the terms of trade and effective exchange rate using cointegration analysis and data from 25 countries. Findings could be summarized by saying that there is o long‐run relation between exchange rate and the terms of trade.

This paper investigates the long‐run relationship between Iranian trade balance and the black market value of Iranian rial by employing cointegration technique. It is shown that in a oil producing country like Iran due to rent‐seeking opportunities, depreciation of the rial in the black...

Various authors have tried to verify the importance of different variables in the reserve demand equation. This article introduces a new independent variable, the gold price, into the reserve demand function. By pooling cross‐section and time‐series (quarterly) data for 19 industrial...

Productivity bias hypothesis claims that deviation of the PPP based exchange rate from the equilibrium rate is mainly due to productivity differentials among countries. Early studies that employed cross‐sectional data in testing the hypothesis provided mixed results. A few time‐series...

Purpose – To avoid aggregation bias by using trade data at bilateral level so that we can determine how sensitive are Britain's inpayments and outpayments to the value of the British pound. Design/methodology/approach – The method is based on the bounds testing approach to cointegration and...

Purpose – The purpose of this paper is to investigate the sensitivity of Indonesia's inpayments and outpayments to currency depreciation on a bilateral basis. Design/methodology/approach – The methodology used is based on the bounds testing approach. Findings – It is found that while real...