International Journal of Sciences: Basic and Applied Research
Abstract
This study examines the relationship between labour productivity and money demand behaviour in Zanzibar. We estimate a model with a ARDL specification and bound test for the cointegration and the long run relationship. This paper also offers support to the explanation that if policy-makers are able to conduct proper monetary policies in a timely manner, they might necessarily influence labour productivity permanently following “well-understood” policy rules as the two variable have a positive relationship. Finally, our evidence also points out that causality relationship is from labour productivity to money demand
